Intellectual Property Rights (IPR) and their accounting have attracted a special attention after World Trade Organization (WTO) has come into existence. The WTO has stressed on the need for protection of IPR. Indian Accounting Standard (AS26) and International Accounting Standard (IAS 38) are related to IPR Accounting. This article is a piece of conceptual and theoretical research in the emerging field by IPR Accounting.

Intellectual Property Rights include patents, copyrights and trademarks. In accounting parlance, these fall in the category of `Intangible Assets'. Accounting for IPR is to be done in accordance of Accounting Standard 26 (AS-26). It is mandatory with effect from April 2003 for all commercial, industrial and business enterprises with an annual turnover of more than Rs. 50 cr. IPR have come into limelight after the WTO stressed the need for their protection. Now the economic pressure of globalization has compelled the whole world to accept International Financial Reporting Standards (IFRS) by 2011. The Institute of Chartered Accountants of India (ICAI) has also agreed to global convergence of Accounting Standards. In view of this development, International Accounting Standard 38 which came into in April 2004, replacing the old IAS 38 (issued in 1998), is also taken into consideration in this article.

An intangible asset is defined as identifiable non-monetary assets that cannot be seen, touched or physically measured. In other words, the entity must be in a position to sold, transferred, leased or rented to other entities. It may be done either individually or as part of a related contract. It may be due to contractual or other legal rights irrespective of separability from the entity. An entity controls an intangible asset if it has power to obtain the future economic benefits from that asset and to restrict access of others to such benefits. In other words, the entity must have legally enforceable rights over an intangible asset.

Intellectual Property Rights, IPR, International Financial Reporting Standards, IFRS, World Trade Organization, WTO, International Accounting Standard, IAS, Institute of Chartered Accountants of India, ICAI, Economic Benefits, Intangible Assets, Direct Marketing Companies, Financial Accounting.