Intangible Assets

Intangible Assets, numbered 1140, is the Fixed Asset group for things of lasting value that have no physical form: Software licences, Goodwill from buying a business, and the Accumulated Amortisation that reduces them. Amortisation is depreciation by another name, used for intangibles, and it is charged monthly from the asset's schedule. Goodwill is the exception: it is not amortised but tested each year for loss in value. The group total on the Balance Sheet is cost less accumulated amortisation. Monthly subscriptions, domain renewals and small apps are expenses, not intangibles; only a licence or system bought for several years is capitalised here. Postings always go to the child ledgers.

Intangible Assets = Software + Goodwill - Accumulated Amortisation.

1. 01Go to Accounts Setup > Chart of Accounts and expand Assets > Non-Current Assets > Intangible Assets.
2. 02Read the children: Software, Goodwill and Accumulated Amortisation.
3. 03Open Financial Reports > Balance Sheet; the group shows the net value of software and goodwill.
4. 04To capitalise a licence, post to Software through a Purchase Invoice with a fixed asset item of category Software (Intangible).
5. 05Never pick Intangible Assets itself on a document; it is a group.

Do not post here. Use Software or Goodwill on an Asset record or Journal Entry.

An accounting software licence of Rs 1,20,000 sits under Intangible Assets and is amortised over three years.