Question

accounting gain on sale if intangibles

Answer 1

Accounting gain on sale of intangibles occurs when:

1. The sale proceeds exceed the carrying (book) value of the intangible asset.

2. The gain is recorded as “Other Income” in the profit and loss account.

3. Calculation: Sale Price – Book Value = Gain.

4. It is a non-operating income unless the business regularly trades such assets.

5. The gain is subject to income tax under the head “business income” or “capital gain,” depending on nature.