Intangibles - Software

[Pareshs]

Dear Experts,

I have the following question:

I have a software booked in year 1 :

Dr Intangibles 1000
Cr Accounts payable 1000

I then released an amortization for a year. In the second year, the vendor came back and said he would allow an discount of 350 on settlement of the net outstanding against this software i.e 650.

My question is do I need to revalue the asset and effect amortizations because of this discount received in the second year?

Regards,
Paresh

 

[DTA93433]

I would book the discount in the period which it is taken. Leave yr. 1 alone.

 

[Fidget]

yes, just adjust amortisation on a going-forward basis. Don't touch year 1.