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Are investments in Intangible Assets considered as Capital Expenditure?

Updated: Apr 2, 2023




...Yes, investments in intangible assets are also generally considered as capital expenditure



....Intangible assets are long-term assets that do not have a physical presence, such as patents, copyrights, trademarks, and goodwill


.....When a company invests in an intangible asset, such as developing a new patent or acquiring a trademark, the cost is typically capitalized on the balance sheet as an intangible asset


SO IN THIS CASE

YOU CAPITALIZE IT?

THEN IT'S CAPITAL EXPENDITURE


......The company then amortizes the asset over its useful life, similar to how it depreciates tangible assets


.......However, the accounting treatment for intangible assets can be more complex than for tangible assets, as the useful life of an intangible asset may be more difficult to estimate


........In addition, the value of an intangible asset may fluctuate over time, and the company may need to perform periodic impairment tests to ensure that the asset is not overvalued on the balance sheet


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