Is Trademark A Current Asset? How It Is Recorded In The Balance Sheet

Is Trademark A Current Asset

A trademark is a symbol that is legally registered by a company and the symbol represents the company’s brand name.

Is Trademark A Current Asset?

A trademark is an intangible asset that has no physical existence or presence but it has significant value in the business and also it helps a business to generate good revenue.

A trademark is classified as a non-current asset rather than a current asset because a trademark is normally occupied for a longer period and has a very limited market.

Note: If a company acquires a trademark then the acquisition cost, legal fees, and other associated costs in acquiring a trademark are capitalized while if the trademark is generated internally then all the costs that are used in developing the trademark are treated as an expense that is recorded as it incurred and is not capitalized.

As we know physical assets are depreciated while intangible assets are amortized. A trademark is amortized over its useful life. The value of the amortization expense is recorded in the income statement and reduces the value of the trademark in the balance sheet.

Look ahead to know how a trademark is presented on the balance sheet of a company:

Non Current Assets:
Property, Plant, and Equipment:xxx
Intangible Assets:xxx
Long Term Investments:xxx
Total Non-Current Assets:xxx

Is trademark a current asset or a fixed asset?

A trademark is an intangible asset that is not treated as a current asset but it is treated as a non-current asset (fixed asset) in the balance sheet.

What type of asset is a trademark?

  • On the basis of convertibility, a trademark is a non-current asset.
  • On the basis of existence, a trademark is an intangible asset.
  • On the basis of usage, a trademark is an operating asset.

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