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Asset Classifcation

Distinguish between Fictitious Asset & Intangible Asset?
Very often these two terms are considered identical but there is significant
difference between these two terms. Intangible assets refer to those fixed assets
that have no physical status at all viz, goodwill, patent right, copyright etc. The
Intangible assets are written off after a specified period
Fictitious assets also have no physical existence but they only include the assets
having the nature of deferred revenue expenditures viz, deferred advertisement
expenses, discount on issue of shares or debentures. These are the assets out of
which benefit or profit for more than one accounting is availed. The main reason
for confusion is that both have no physical status but the discussions above are
big enough for all to understand the difference between the two terms
"Fictitious assets" can be easily distinguished from intangibles. arge additions
to fixed assets are definitely sighted to ensure physical existence by auditors.
The reasonableness of their depreciation is also tested. !ocumentation of
intangible assets is also chec"ed to ensure that they#re not actually fictious and
it is ensured that they#re amortized appropriately over their useful lives.
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