TaxTMI 
TaxTMI 
Royalty and technical know-how fee
X X X X Extracts X X X X
X X X X Extracts X X X X
....lty and Technical Know-how Fee, for determination of the cost of product or service, and their presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the amount of Royalty and Technical Know-how Fee with reasonable accuracy. 3. Scope This standard should be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of the amount of Royalty and Technical Know-how Fee including those requiring attestation. 4. Definitions The following terms are being used in this standard with the meaning specified. 4.1 Cost Object: This includes a product, service, cost centre, act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....geably. 4.4 Imputed Costs: Hypothetical or notional costs, not involving cash outlay, computed for any purpose.3 4.5 Technical Know-how Fee: Technical Know-how Fee is a lump sum or periodical amount payable to provider of technical Know-how in the form of design, drawings, training of personnel, or practical knowledge , skills or experience. 5. Principles of Measurement: 5.1 Royalty and Technical Know-how Fee paid or incurred in lump-sum or which are in the nature of 'one - time' payment, shall be amortised on the basis of the estimated output or benefit to be derived from the related asset. Examples: Amortisation of the amount of Royalty or Technical Know-how fee paid for which the benefit is ensued in the current or future pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of Royalty fee paid for mining rights shall form part of the cost of material. 6.3 The amount of Royalty and Technical Know-how fee shall be assigned on the nature/ purpose of such fee. The amount of royalty and technical know-how fee related to product or process know how shall be treated as cost of production; if it is related to trademarks or brands then it shall be treated as cost of sales. 7. Presentation 7.1 The amount Royalty and Technical Know-how fee shall be presented as a separate cost head with suitable classification. 8. Disclosures 8.1 The cost statements shall disclose the following: 1. The basis of distribution of the amount Royalty and Technical Know-how fee to the cost objects/ cost units. 2. Quantity and the r....