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11.8 Luxembourg Intangible Assets (Goodwill, Patents, etc.)

Intangible Assets in Luxembourg​

Common Intangible Assets:

  • Goodwill
  • Patents
  • Trademarks
  • Software
  • Licenses
  • Franchises

Goodwill​

Goodwill:

  • Arises in business acquisitions
  • Excess of purchase price over fair value of net assets
  • Indefinite life
  • Not amortized
  • Tested for impairment

PCN Account:

  • 202000: Goodwill (Fonds de Commerce)

Patents​

Patents:

  • Legal protection for inventions
  • Finite life (usually 20 years)
  • Amortized over useful life
  • Can be purchased or internally developed

PCN Account:

  • 201000: Patents (Brevets)

Trademarks​

Trademarks:

  • Brand names, logos
  • Can be indefinite life
  • Not amortized if indefinite
  • Tested for impairment

PCN Account:

  • 203000: Other Intangible Assets (or specific sub-account)

Software​

Software:

  • Purchased software: Capitalize and amortize
  • Internally developed: Usually expense, may capitalize if criteria met
  • Finite life
  • Amortized over useful life

PCN Account:

  • 203000: Other Intangible Assets (or specific sub-account)

Luxembourg Compliance Note​

Intangible assets in Luxembourg:

  • Must be properly classified (PCN Class 2)
  • Finite life: Amortize
  • Indefinite life: Test for impairment
  • Must be disclosed
  • Must comply with accounting standards
  • Must maintain proper documentation

Think It Through​

How does accounting for goodwill differ from accounting for patents? Why are they treated differently?