@article{10.11648/j.ijls.20230603.13,
  author = {Ganeta Minkova},
  title = {Accounting and Taxation of Internally Generated Intangible Assets},
  journal = {International Journal of Law and Society},
  volume = {6},
  number = {3},
  pages = {186-192},
  doi = {10.11648/j.ijls.20230603.13},
  url = {https://doi.org/10.11648/j.ijls.20230603.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijls.20230603.13},
  abstract = {Capitalized intangible assets are part of the company's investing activities. Over the last 5 years, the 27 Member States of the European Union have increased their investments, including those in intangible assets. When a company has an experienced research team, it is able to create intangible assets without having to purchase assets or hire other organizations to create them. However, internally created intangible assets are treated differently for accounting and tax purposes than purchased ones. This study examines the differences made in the legislation in the treatment of the two sets of intangible assets, and attempts to uncover the reasons for this situation. The study aims to address: whether, and if so why, there should be differences in the treatment of internally generated and purchased intangible assets; whether the cost of internally generated intangible assets should be recognized for tax purposes, given that their carrying amount may be disputed, which may lead to litigation; whether internally generated intangible assets should be recognized when intangible asset incentives are granted. From a research perspective, the concept and different types of intangible assets are first considered. Secondly, their reporting for publicity purposes is analyzed, since the financial statements prepared by a company play an important informational role for other companies, for statistical purposes, for the listing of the company on stock markets, etc. Assets are recorded on the company's balance sheet, but are also accounted for in whole or in part as expenses that affect its financial result. The Republic of Bulgaria applies International Accounting Standards (IAS/IFRS) for large companies and groups of companies, but has also adopted National Accounting Standards (NAS) based on Bulgarian accounting tradition and concept. Thirdly, the taxation of intangible assets is examined in terms of corporate tax in Bulgaria rather than indirect taxation. The study focuses on the comparison of Bulgarian taxation and US taxation, as these are two very different models of legal technique in the design of direct corporate income tax. Despite the differences, the analyses indicate that the overall treatment of intangible assets for tax purposes shows similarities. The study does not employ an empirical method, as the analysis is conducted via doctrinal research and comparative study of normative acts and administrative practice. The study ends with conclusions.},
 year = {2023}
}

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TY  - JOUR
T1  - Accounting and Taxation of Internally Generated Intangible Assets
AU  - Ganeta Minkova
Y1  - 2023/07/08
PY  - 2023
N1  - https://doi.org/10.11648/j.ijls.20230603.13
DO  - 10.11648/j.ijls.20230603.13
T2  - International Journal of Law and Society
JF  - International Journal of Law and Society
JO  - International Journal of Law and Society
SP  - 186
EP  - 192
PB  - Science Publishing Group
SN  - 2640-1908
UR  - https://doi.org/10.11648/j.ijls.20230603.13
AB  - Capitalized intangible assets are part of the company's investing activities. Over the last 5 years, the 27 Member States of the European Union have increased their investments, including those in intangible assets. When a company has an experienced research team, it is able to create intangible assets without having to purchase assets or hire other organizations to create them. However, internally created intangible assets are treated differently for accounting and tax purposes than purchased ones. This study examines the differences made in the legislation in the treatment of the two sets of intangible assets, and attempts to uncover the reasons for this situation. The study aims to address: whether, and if so why, there should be differences in the treatment of internally generated and purchased intangible assets; whether the cost of internally generated intangible assets should be recognized for tax purposes, given that their carrying amount may be disputed, which may lead to litigation; whether internally generated intangible assets should be recognized when intangible asset incentives are granted. From a research perspective, the concept and different types of intangible assets are first considered. Secondly, their reporting for publicity purposes is analyzed, since the financial statements prepared by a company play an important informational role for other companies, for statistical purposes, for the listing of the company on stock markets, etc. Assets are recorded on the company's balance sheet, but are also accounted for in whole or in part as expenses that affect its financial result. The Republic of Bulgaria applies International Accounting Standards (IAS/IFRS) for large companies and groups of companies, but has also adopted National Accounting Standards (NAS) based on Bulgarian accounting tradition and concept. Thirdly, the taxation of intangible assets is examined in terms of corporate tax in Bulgaria rather than indirect taxation. The study focuses on the comparison of Bulgarian taxation and US taxation, as these are two very different models of legal technique in the design of direct corporate income tax. Despite the differences, the analyses indicate that the overall treatment of intangible assets for tax purposes shows similarities. The study does not employ an empirical method, as the analysis is conducted via doctrinal research and comparative study of normative acts and administrative practice. The study ends with conclusions.
VL  - 6
IS  - 3
ER  - 

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