Accounting for a trademark: what nuances should an accountant know

A trademark is an important intangible asset for many companies. However, its accounting and taxation have their own peculiarities, which must be taken into account by the accountant. Let's consider the main points related to the registration and taxation of trademarks in Ukraine.

What is a trademark?

A trademark (or trademark, also a sign for goods and services) is a designation by which the goods and services of one person differ from the goods and services of other persons. It can include words, letters, numbers, pictorial elements, color combinations, sounds and even smells.

In everyday life, you may have heard such informal definitions as brand, logo, slogan - they also belong to a trademark.

Features of accounting

The key point in the accounting of trademarks is the method of obtaining them:

1. If the trademark is developed and registered independently:

• The costs of its creation are not recognized as an intangible asset
• All costs are charged to account 93 "Sales costs" in the period when they are incurred

2. If the trademark is purchased:

• Recognized as an intangible asset on account 123 "Rights to commercial designations"
• It is depreciated during the period of useful use

This approach is explained by the fact that when creating a trademark independently, it is very difficult to reliably estimate all costs associated with it and separate them from the general costs of business development.

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Amortization of acquired trademarks

For purchased trademarks, it is recommended:

• Use the straight-line method of depreciation
• Set the period of useful use of 10 years (corresponding to the validity period of the certificate)
• Take the liquidation value equal to zero

Features of taxation

Income tax:

• Costs for creating your own trademark reduce the object of taxation in the period of their occurrence
• When acquiring a trademark, costs are included through depreciation
• Tax differences usually do not arise

VAT:

• When creating one's own trademark, VAT is included in the tax credit on incurred expenses
• The sale of a trademark is subject to VAT at the rate of 20%
• Royalties for the use of a trademark are not subject to VAT

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Royalties for use of the trademark

Royalty is a fee for the right to use a trademark without transferring ownership rights. Accounting features:

• The user has it displayed on expense accounts (93 or 949)
• With the owner - as other operating income (719)
• No VAT is charged, subject to compliance with royalties

Key wiring

1. Creating your own brand:

• Dt 93 - Kt 631 - development costs
• Dt 93 - Kt 311 - payment of registration fees

2. Purchase of a trademark:

• Dt 154 - Kt 631 - acquisition
• Dt 123 - Kt 154 - commissioning

3. Calculation of royalties:

• From the user: Dt 93 - Kt 684
• From the owner: Dt 373 - Kt 719

Correct accounting and taxation of transactions with trademarks will avoid errors and claims from regulatory authorities. In case of difficult situations, it is recommended to consult specialists.

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Assistance in registering and accounting for trademarks

The company "Prikhodko and Partners" provides a full range of services related to trademark registration and accounting. You can order both consultations and full support in the matter, including outsourcing your company's accounting or any legal issues to us.

Why it is beneficial:

1. Our staff includes more than 50 specialists with unique knowledge that cannot be replaced by any full-time lawyer or accountant.
2. We are adaptable and mobile - the option when the employee falls out of the work schedule for any reason is excluded.
3. We have a flexible pricing policy - we will always find a mutually beneficial option for cooperation.

If you value expertise, responsibility, reputation - contact the company "Prikhodko and Partners". For a consultation, fill out the form below.