Account 04 in accounting: intangible assets

Definition of intangible assets

Intangible assets are investments in objects without a tangible form in order to obtain financial benefits.
They are an important component of the production process at the enterprise. To account for them, accounting account 04 is used. Non-current funds are accounted for in the account. 04 subject to the following conditions:

  • they are guaranteed to be cost-effective;
  • the enterprise has official rights to these funds;
  • it is possible to identify a certain asset among others;
  • the planned period of use is more than a year;
  • can be displayed in value terms;
  • they do not have a material form.

All these parameters for assigning an asset to intangible assets must be fulfilled simultaneously.

The concept of intangible assets

For intangible assets the following basic rules are followed:

  • they are intended for long-term use over 1 year;
  • not intended for sale;
  • must bring economic benefit;
  • the value of objects can be reliably determined.

Accounting for intangible assets is regulated by PBU 14/2007.
Intangible assets include the exclusive right to:

  • Computer programs, databases;
  • inventions, utility models, industrial designs;
  • topology of integrated circuits;
  • breeding achievements;
  • know-how, so-called production secrets;
  • trademarks;
  • brand names;
  • commercial designations;
  • business reputation of the organization.

The organization's right to own an intangible asset and its use must be properly documented.
The following may serve as supporting documents:

  • evidence;
  • patents;
  • agreement on alienation of exclusive rights;
  • license agreement.

An intangible asset is accepted for accounting on the basis of an acceptance certificate. For each object of intangible assets accepted for accounting, an accounting card, Form IA-1, is filled out.

Capitalization of intangible assets: main transactions

An important issue is the reflection of the initial cost of the object when it is necessary to capitalize intangible assets. Account 04 of the accounting displays the initial cost, which has already been formed and is collected on the account. 08. If the acquisition object does not imply additional costs, then the postings to account 04 (and others) will be as follows:

Operation Dt CT
Acquisition costs 08 60, 76
Reflection of input VAT if the buyer keeps VAT records 19 60, 76
The initial cost of the intangible asset has been formed 04 08-5
The amount of VAT on the object is accepted for deduction 68 19-2

The disposal of intangible assets is carried out in the following cases:

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  • the period for using the exclusive right has expired;
  • the right is sold or transferred to another legal entity;
  • due to obsolescence;
  • a contribution has been made to the authorized capital;
  • shortages were identified, etc.

Intangible objects are written off at their residual value (depreciation charges for the period of their use are subtracted from the original cost) to the debit of the account. 91. Proceeds from sales or other disposals are included in other income on the account loan. 91:

  • Dt 62 Kt 91 - implementation of exclusive rights;
  • Dt 05 Kt 04 - the amount of accrued depreciation for the sold object;
  • Dt 91 Kt 04 - the residual value of the object is included in expenses.

Practical examples of transactions on this account

Let's assume that a certain enterprise has approached an agency with a request to create a video sequence as part of an advertising campaign for a new product. The cost of the order was paid in advance in full and amounted to 50.0 thousand rubles. without VAT. Once the video was received, it was determined to have a useful life of 14 months and the depreciation method was selected as straight-line. After 4 months, the created video was lost.

In this case, the accounting entries will look like this:

  • Dt 60 – Kt 51 – 50.0 thousand rubles, prepayment for video sequence;
  • Dt 08 - Kt 60 - 50.0 thousand rubles, investment in an object of intangible property;
  • Dt 04 - Kt 08 - 50 thousand rubles, acceptance of the object onto the balance sheet;
  • Dt 26 - Kt 04 - depreciation for 4 months of use;
  • Dt 91 - Kt 04 - write-off of the residual value of the asset due to loss.

Subaccounts of account 04

Let us consider in detail the subaccounts that can be opened to the account for intangible assets in accounting:

  • Subaccount 04-1 “Exclusive rights” serves to summarize information about the rights of the patent holder, author or trademark owner.
  • Subaccount 04-02 “Organizational expenses” records expenses that are associated with the creation of a legal entity and are part of the founders’ contribution to the authorized capital of the enterprise.
  • Subaccount 04-03 “Business reputation” reflects the positive business reputation that arises when purchasing an enterprise (as property) if the acquisition price exceeds the book value of all the company’s assets, and when purchasing at an auction or competition - the estimated value.
  • Subaccount 04-04 “Expenditures on research, development and technological work” is necessary to summarize information about the enterprise’s costs for these types of work.

Account 04 in accounting: what is taken into account?

Let us consider in detail what is to be reflected in the “Intangible Assets” accounting account. Like fixed assets, intellectual rights are accounted for at historical cost, which, in accordance with PBU 14/2007, can be formed by the following expenses:

  • payment amounts under contracts for the acquisition of exclusive rights;
  • customs payments;
  • payment for consulting services on acquisition;
  • salary and deductions from it for employees creating intangible assets;
  • depreciation of fixed assets or other intangible assets used to create a new asset;
  • other expenses if they are directly related to the creation or acquisition.

Borrowing costs, including interest, are included in the initial cost of an object of intellectual rights only if it corresponds to the characteristics of an investment asset (the costs of creating which are significant and the period for its creation is also long).

The initial cost of objects received free of charge is their market price for which they can be sold at the current moment. Independent appraisers are usually involved to determine it.

Which accounts does it correspond with?

Account 04 can be in correspondence with the following main groups of accounting accounts:

By debit:

  • 08 — accounting for intangible resources purchased on a paid basis;
  • 08 - accounting for intangible objects contributed by the founders in the form of a contribution to the authorized capital of the enterprise;
  • 08 - free registration of intangible assets;
  • 79 - intangible funds are reflected upon termination of the trust management agreement.

By loan:

  • 05 — reduction in the level of depreciation taking into account the disposal of intangible assets;
  • 08 (20, 23, 25, 26, 29, 44, 97) - depreciation was calculated without using an account. 05;
  • 91 - disposal of intangible assets at residual value.

Postings to account 04

To begin with, it should be said that account 04 in the balance sheet is active. Its debit part reflects the acceptance of the designated objects on the balance sheet, and its credit part reflects their disposal. In this case, intangible assets must be reflected in the balance sheet at their actual cost, which consists of the costs of their purchase or creation, as well as the costs of their delivery, customs duties and commissions to intermediaries of the purchase and sale transaction.

If we take into account the sources of origin of the designated objects, they can be reflected on the balance sheet in two ways. If they are purchased, the following accounting entry is made:

  • Dt 04
  • Kt 50, 51, 52 or 55 accounts.

If the asset is created by the companies’ own efforts, then in this case the postings look like this:

  • Dt 08 - Kt 60, 10, 68, 69, 76 and 70, respectively, for each of the cost items for the creation of a specific object of intangible property;
  • Dt 04 - Kt 08 in case of completion of the development process and creation of the object, and its complete readiness for use.

If such assets are disposed of, then in this case 04 balance sheet account is credited, and accounts 91.2 and 58.1 are debited in the case of gratuitous transfer of the object to third parties and its contribution to the authorized capital, respectively.

Documents confirming receipt of intangible assets

Postings with intangible funds are carried out on the basis of available primary, correctly completed documentation:

  • patent;
  • certificates of registration of rights when creating an asset;
  • documents on the purchase of this type of asset;
  • certificate of registration of rights (issued in Rospatent);
  • purchase and sale agreements with registration in Rosreestr, etc.


Accounting 04 “Intangible assets” serves to summarize information about the presence and movement of intangible assets of the enterprise, as well as the company’s costs for research, development and technological work. This type of organization's funds accrues according to certain conditions. Subaccounts 04 accounts can be opened for analytical accounting. All transactions on the account. 04 are carried out strictly in the presence of supporting documents.

In what account are intangible assets reflected?

The answer to the question on which account intangible assets are accounted for is set out in instruction 94n (Order of the Ministry of Finance of the Russian Federation dated October 31, 2000): information on the presence and change, disposal of intellectual rights is reflected in the account. 04, which is active. By debit we take into account the receipt, and by credit we take into account the disposal of the asset. In the balance sheet, account balances are reflected minus depreciation if the period of their use has been established for intellectual objects. Analytical accounting is organized for each acquired or created intellectual right.

Chart of accounts. Account 04 “Intangible assets”

Accounting ~ chart of accounts >>

Account 04 “Intangible assets” is intended to summarize information on the presence and movement of the organization’s intangible assets, as well as on the organization’s expenses for research, development and technological work.

Intangible assets are accepted for accounting in account 04 “Intangible assets” at their original cost.

For intangible assets for which depreciation is accounted for without using account 05 “Depreciation of intangible assets”, the accrued amounts of depreciation charges are written off directly to the credit of account 04 “Intangible assets”.

Acceptance of intangible assets for accounting is reflected in the debit of account 04 “Intangible assets” in correspondence with account 08 “Investments in non-current assets”.

When intangible assets are disposed of (sold, written off, transferred free of charge, etc.), their value recorded in account 04 “Intangible assets” is reduced by the amount of depreciation accrued during use (from the debit of account 05 “Amortization of intangible assets”). The residual value of disposed objects is written off from account 04 “Intangible assets” to account 91 “Other income and expenses”.

The organization's expenses for research, development and technological work, the results of which are used for the production or management needs of the organization, are accounted for separately on account 04 “Intangible assets”.

Expenses for research, development and technological work are accepted for accounting on account 04 “Intangible assets” in the amount of actual costs, while account 04 “Intangible assets” is debited in correspondence with the credit of account 08 “Investments in non-current assets”.

When writing off in accordance with the established procedure expenses for research, development and technological work, the results of which are used for the production or management needs of the organization, account 04 “Intangible assets” is credited to expenses for ordinary activities in correspondence with the debit of cost accounting accounts (20 “Main production”, 26 “General expenses”, etc.).

Upon termination of the use of the results of research, development and technological work in the production of products (performance of work, provision of services) or for management needs, amounts of expenses not included in expenses for ordinary activities are written off to the debit of account 91 “Other income and expenses” » in correspondence with the credit of account 04 “Intangible assets”.

Analytical accounting for account 04 “Intangible assets” is carried out for individual objects of intangible assets, as well as for types of expenses for research, development and technological work. At the same time, maintaining analytical accounting should provide the ability to obtain data on the presence and movement of intangible assets, as well as the amounts of expenses for research, development and technological work.

Account 04 “Intangible assets” corresponds with the accounts

by debit on loan
08 Investments in non-current assets 51 Current accounts 52 Currency accounts 55 Special accounts in banks 76 Settlements with various debtors and creditors 79 On-company settlements 80 Authorized capital 05 Amortization of intangible assets 20 Main production 23 Auxiliary production 25 General production expenses 26 General business expenses 29 Servicing production and facilities 44 Selling expenses 76 Settlements with various debtors and creditors 79 On-farm settlements 80 Authorized capital 91 Other income and expenses 97 Deferred expenses

Accounting ~ chart of accounts >>

Creation of an intangible asset

In addition to the fact that an intangible asset can be acquired for a fee, that is, purchased, it can also be created on behalf of an organization on its own or with the involvement of third-party services.
In this case, the intangible asset is taken into account in a similar way at its historical cost, consisting of the cost of all expenses associated with the creation of the intangible asset.

Expenses in addition to paying duties and fees can also include remuneration of their employees involved in the creation of an intangible asset, as well as insurance premiums accrued to them, the cost of services of third-party organizations, expenses for research and other equipment used in the process of creating intangible assets, as well as depreciation accrued on them.

In a similar way, all expenses are collected on the debit of account 08, after which one transaction for the total amount is sent to account 04 (posting D04 K08).

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