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Intangible Fixed Assets |
See Also
Adjustment of profit | Deferred tax introduction | Expense analysis | Fixed assets | Foreign income | Loan relationships analysis | Losses and allowances | Profit and loss account / Income statement (D schedule) | Short term timing / temporary differences
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors | Frequently asked questions
The schedule allows the user to analyse gains and losses relating to intangible fixed assets. The schedule applies the new rules to intangible fixed assets that are acquired or created on or after 1 April 2002 and makes appropriate entries on the A schedule and the Losses schedule.
For the purposes of the new rules "intangible assets" have the meaning they have for accounting purposes and specifically includes intellectual property (e.g. patents and trade marks) and goodwill. There is no requirement that the assets are capitalised in the accounts.
One copy of this schedule may be developed from the Fixed assets schedule. Alternatively, it is created automatically the first time that the Link > Intangible fixed assets option is used from the Profit and loss account / Income statement (D schedule) or from an Expense analysis schedule. By selecting the relevant row to link from, the amount entered is posted to a new row inserted on the Intangible fixed assets schedule.
The user must complete the intangible fixed assets schedule by analysing the amounts falling within the intangible fixed asset rules into the following types according to the purpose for which the assets are held:
Income (expense) arising this period
For each row enter the amount of income or expenditure recognised in the accounts. This should agree with the amounts shown within the Reconciliation section at the foot of the schedule.
(Taxable)/allowable
Enter the taxable credit or allowable debit on the intangible fixed asset.
Debits on intangible fixed assets may arise in any of the following instances:
Credits on intangible fixed may assets arise in any of the following instances:
(Non taxable) / Disallowable
This is automatically calculated on the schedule.
Taxable/(deductible) in later periods
Where relief is deferred, this should be entered accordingly using the correct sign notation.
The totals will then be posted to the Short term timing differences schedule contained within the Deferred tax (F) schedule pack.
The user should enter the opening and closing NBV and tax WDV.
NBV, end of period per accounts
In order to confirm that this schedule reconciles to the accounts, the user should complete the check total for NBV carried forward per the accounts, below the calculated figure.
Amortisation per accounts
The user should enter the amortisation per the accounts. The total is compared against a cell in the "Reconciliation to P/L account" section in which the user should enter that part of the profit and loss account movement that represents amortisation.
Expenditure excluded by election
From 2010, where an election is made to exclude computer software from treatment as an intangible asset for tax purposes, the user should enter the relevant expenditure here. A formal claim will be included on the schedule.
The total is linked automatically into a cell on the Fixed assets schedule, to ensure that the fixed assets balance.
Intangible assets and the tax accounting sheets
The intangible fixed asset sheet and supporting sheets should link automatically to the tax accounting sheets. In some scenarios (if the supporting sheets are not used), a permanent disallowance in respect of an intangible asset may need to be added manually to the factors affecting the tax charge sheet. A check error on the factors affecting the tax charge sheet should notify the user if this is the case.
Non qualifying movements in respect of intangible fixed assets should be manually entered on the non qualifying assets sheet in the intangibles column to ensure the deferred tax calculations are adjusted correctly. Any adjustments in relation to a change in tax cost (i.e. in the ?Other changes to tax cost? column on the Intangibles tax values sheet) should also be entered on the non-qualifying asset sheet. Any additions or amortisation in relation to the change in tax cost should also be entered on this sheet.
The schedule has two standard supporting schedules:
Intangibles accounts values
Intangibles tax values
These schedules can be developed for any row in the three sections (trade, property business and non-trade) and will post values to the Intangible fixed assets schedule. The use of these supporting schedules is recommended where the user has a requirement to track the movement of the net book value, tax cost and tax WDV of intangible fixed assets that have been capitalised. If this not the case the existing columns on this schedule should be adequate.
This schedule together with the Intangibles tax values schedule are developed from the Intangible fixed assets schedule to track the movements of NBV and tax WDV in more detail.
These schedules will calculate and post values, including the taxable/allowable value, to the Intangible fixed assets schedule.
Please note that these two schedules are designed to allow data input and calculations to be performed on the same respective row e.g. if data is entered on the Intangibles accounts values schedule in row 6, the tax values that relate to that expenditure are entered and calculated on row 6 on the Intangibles tax values schedule.
Additions can be entered on this schedule and will be posted to the Intangibles tax values schedule, on which any reduction in respect of reinvestment relief can be entered.
The amortisation or write down per the accounts for an item of expenditure is entered on this schedule. The tax value of the amortisation or write down is calculated on the Intangibles tax values schedule using the applicable method as indicated by the selector flag in column B on the Intangibles tax values schedule.
If a disposal or transfer out has occurred the user should ensure the selector flag in column B on the Intangibles tax values schedule is set to "Disposal" or "Transfer out" respectively.
This schedule together with the Intangibles accounts values schedule are developed from the Intangible fixed assets schedule to track the movements of NBV and tax WDV in more detail.
These schedules will calculate and post values, including the taxable/allowable value, to the Intangible fixed assets schedule.
Please note that these two schedules are designed to allow data input and calculations to be performed on the same respective row e.g. if data is entered on the Intangibles accounts values schedule in row 6, the tax values that relate to that expenditure are entered and calculated on row 6 on the Intangibles tax values schedule.
Additions can be entered on Intangibles accounts values schedule and will be posted to the Intangibles tax values schedule, on which any reduction in respect of reinvestment relief can be entered.
The amortisation or write down per the accounts for an item of expenditure is entered on Intangibles accounts values schedule. The tax value of the amortisation or write down is calculated on this schedule using the applicable method as indicated by the selector flag in column B.
If a disposal or transfer out has occurred the user should ensure the selector flag in column B is set to "Disposal" or "Transfer out" respectively. If any part of a resultant gain is subject to reinvestment relief this should entered in the "(Gain) reinvested" column.
From 2010 where an election is made to exclude computer software from treatment as an intangible asset for tax purposes, the user should ensure the selector flag in column B is set to "Elect to exclude". The cost will then be included in the relevant column and the Tax cost c/f will be reduced to nil.
On carry forward, this schedule is automatically developed in the subsequent computation if it is present in the prior year computation. In the subsequent computation, the Taxable/(deductible) amounts brought forward are entered automatically.
Error | How to solve it |
| NBV c/f out of balance by | The net book value calculated by the software needs to equal the net book value calculated in the accounts. The NBV figure from the accounts needs to be entered on this schedule. If this error appears, check the additions, disposals and depreciation figures are correct. |
Election to exclude computer software from treatment as IFA
The debit included in the P&L should be treated as (Non taxable)/Disallowable in the Intangible fixed assets schedule.
The other details will be as included as normal on the Intangible fixed assets schedule, except that there will be no TWDV c/f value.
The same will apply if the Intangible accounts values and Intangible tax values schedules are used.
Then include the expenditure as an addition under the relevant capital allowance type in the Additions in period section of the Fixed assets (C) schedule, as per usual.