Are patents current assets?

CaptainForest

No.

Bookmedic

They are considered a Fixed Asset since they are long term assets.

jal343

No, a Patent is an intangible asset because it's difficult to put a monetary value to it.

bunnyKutty

No. Patents are not current assets but fictitious assets. There is no physical asset existing in the business but the benefit out of acquring the asset is enjoyed by the business and therefore the cost of patents is spread over the life of the asset. A part of the cost is charged to income statement as amortization and the balance exists in the balance sheet as an asset.

Bookmedic

I just went through this with this audit with our CPA's since we have a new patent. I had this as an Asset under long term with just the name Patents. They moved it to a fixed asset with the cost that we have incurred so far being the value. Then they added an account to Assets (like a goodwill value) (intangible) and put a value on the patent based on expected value.

Is this not true? If not, then I will contact our Auditors and ask why they did what they did to our current 2006 books.\


Bookmedic

bunnyKutty

Assets are broadly classified as current assets(which can be easily converted into cash in a period less than 1 year) and fixed assets & investments(which cannot be converted into cash in a period less than 1 year). If patents are recorded as fixed or long term asset there is nothing wrong as it is not easily converted into cash and will be used for a longer period of time.
If the classification is done on a detailed basis then some accountants record this as fictitious asset (which is not a real asset) and some record it as intangible asset (one which is not tangible).
Patents are recorded at cost price at which they are acquired and periodically patents are amortized. Patents are not valued assets like goodwill.