Other intangible assets are patents and licences.
During the financial period, the company ceased trading and has commenced the process of closing down its business operations. As a result, the directors have reviewed the carrying value of the company’s intangible fixed assets.
The company held a patent, previously recognised as an intangible asset, which was associated with the trade now discontinued. Given that the patent will no longer generate future economic benefits, its recoverable amount has been assessed as nil.
Accordingly, an impairment charge of £4,917 has been recognised in the profit and loss account, reducing the carrying value of the intangible asset to £nil at the balance sheet date.