How to Present your Trademark in Financial Statements?
Liquidators, who are appointed during the liquidation of capital companies, plan what should be done in the liquidation process of the company when they start their duty.
How to Present your Trademark in Financial Statements?
Liquidators, who are appointed during the liquidation of capital companies, plan what should be done in the liquidation process of the company when they start their duty. Usually, the method used is to make a valuation by evaluating the active assets of the company. They prepare a report summarizing the situation and an inventory showing the financial conditions and a balance sheet and submit it to the approval of the general board.
The issue that is often overlooked at the start and the end of the liquidation process is that the Intellectual property rights of the company, which are not among the active assets, are not accounted for.
Since the subject I will focus on is tangible and intangible assets, let's see what is followed in which account in the table below,
As I mentioned in the tables and explanations, since the assets and values of the company are in the balance sheets, they are taken into consideration in the liquidation process. However, while Intellectual Property Rights are registered in the name of the company in official institutions, they do not appear on the balance sheets in many companies. It escapes the attention of the liquidator among the rights that do not appear in the balance sheet.
Going back to the beginning of the problem, the invoices for the expenditures made for Intellectual property rights are directly transferred to the expense as they are seen as an expense-cost in the relevant period. Since the costs of these expenses are low, financial advisors generally see them as expenses.
Trademark, patent, design, and domain transactions belonging to Intellectual property rights are subjects that should be in the company's active assets as long as the company continues to exist.
The Turkish Patent and Trademark Office is the institution where rights such as trademarks, patents, and designs are registered. Applications made here are registered on behalf of the company. Likewise, if the trademarks are registered abroad, they are protected in the relevant countries. Since these rights are registered with small fees, they are generally shown in the company's expenses, however, if the trademark patent rights are sold or transferred, this will generate a considerable income.
It is important to highlight this topic. While the company continues its activities; in cases of address changes, name changes, mergers, divisions and changes of type/kind, the company must also make these changes both in Turkey and in the countries concerned and must enter them into registers.
In domain registrations, those with com.tr extension are registered by the Middle East Technical University. It becomes one of the rights of the company. Domain registration fees are small, instead of recording these in expenses, they should be followed in the rights account and renewed when the period comes.
After the liquidation is concluded, especially when the assets belonging to Intellectual property rights are not included in the liquidation, no action can be taken after the liquidation is concluded.
A trademark, patent or domain name registered in your name belongs to you. However, as there is no signatory circular and the company has been dissolved, official transactions cannot be made.
In fact, when you want to establish a business with a different title and make transactions for the brand that you think belongs to you, your brand and derivatives in the new company will be rejected due to your own brand remaining in the registry of the dissolved company.
To summarize briefly what needs to be done, according to Article 16 of the Decree Law No. 556, it is legally possible to transfer all or part of the goods or services for which the trademark is registered, to another person or firm, in other words, to sell.
With the execution of the transfer agreement made at the notary, the trademark right leaves the ownership of the transferor and becomes an asset of the transferee. After the transfer is made in the notary, the transfer must be registered with the Turkish Patent and Trademark Office.
Based on this information, it is necessary to take action in the liquidation process in order to transfer trademarks or other Intellectual Property Rights. For such rights, I recommend that you open a new account under 260- Rights accounts for each transaction and follow these transactions. I think it would be appropriate for company executives and owners to instruct their financial advisors to keep such transactions in account of rights.
In case the official address of the company changes, similar to applying to SGK and the tax office, the address change must be submitted to the Turkish Patent and Trademark Office for Intellectual property rights through the relevant attorneys.
Journal entry of the rights account will be as follows:
------------------------- / ---------------------------
260.01.00001 - "x" Trademark Application - Turkey 1,000 TL
191.01.00001- Deductible VAT Account 180 TL
320.01.00001- Relevant Attorney's Office 1.180 TL
------------------------- / -------------------------------
Last word; Your brand, which you have spent and invested in for years, may not be transferred during liquidation and may be left out of the process.
Erdal Şölen
Financial Affairs Director
erdal.solen@destekgroup.com.tr
The issue that is often overlooked at the start and the end of the liquidation process is that the Intellectual property rights of the company, which are not among the active assets, are not accounted for.
Since the subject I will focus on is tangible and intangible assets, let's see what is followed in which account in the table below,
| Code | Account Name |
| 250 | Land and Plots |
| 251 | Underground and Overland Plants |
| 252 | Buildings |
| 253 | Plants, Machinery and Devices |
| 254 | Vehicles |
| 255 | Fixtures |
| 256 | Other Tangible Fixed Assets |
| 260 | Rights |
| 267 | Other Intangible Fixed Assets |
| Lands | To the land registry |
| Underground and Overland Plants | Articles written in the main contract |
| Buildings | To the land registry |
| Plants, Machinery and Devices | Company balance sheets |
| Vehicles | To the Traffic Registry |
| Fixtures | In the company inventory book and balance sheets |
| Rights | Very rarely on balance sheets |
Going back to the beginning of the problem, the invoices for the expenditures made for Intellectual property rights are directly transferred to the expense as they are seen as an expense-cost in the relevant period. Since the costs of these expenses are low, financial advisors generally see them as expenses.
Trademark, patent, design, and domain transactions belonging to Intellectual property rights are subjects that should be in the company's active assets as long as the company continues to exist.
The Turkish Patent and Trademark Office is the institution where rights such as trademarks, patents, and designs are registered. Applications made here are registered on behalf of the company. Likewise, if the trademarks are registered abroad, they are protected in the relevant countries. Since these rights are registered with small fees, they are generally shown in the company's expenses, however, if the trademark patent rights are sold or transferred, this will generate a considerable income.
It is important to highlight this topic. While the company continues its activities; in cases of address changes, name changes, mergers, divisions and changes of type/kind, the company must also make these changes both in Turkey and in the countries concerned and must enter them into registers.
In domain registrations, those with com.tr extension are registered by the Middle East Technical University. It becomes one of the rights of the company. Domain registration fees are small, instead of recording these in expenses, they should be followed in the rights account and renewed when the period comes.
After the liquidation is concluded, especially when the assets belonging to Intellectual property rights are not included in the liquidation, no action can be taken after the liquidation is concluded.
A trademark, patent or domain name registered in your name belongs to you. However, as there is no signatory circular and the company has been dissolved, official transactions cannot be made.
In fact, when you want to establish a business with a different title and make transactions for the brand that you think belongs to you, your brand and derivatives in the new company will be rejected due to your own brand remaining in the registry of the dissolved company.
To summarize briefly what needs to be done, according to Article 16 of the Decree Law No. 556, it is legally possible to transfer all or part of the goods or services for which the trademark is registered, to another person or firm, in other words, to sell.
With the execution of the transfer agreement made at the notary, the trademark right leaves the ownership of the transferor and becomes an asset of the transferee. After the transfer is made in the notary, the transfer must be registered with the Turkish Patent and Trademark Office.
Based on this information, it is necessary to take action in the liquidation process in order to transfer trademarks or other Intellectual Property Rights. For such rights, I recommend that you open a new account under 260- Rights accounts for each transaction and follow these transactions. I think it would be appropriate for company executives and owners to instruct their financial advisors to keep such transactions in account of rights.
In case the official address of the company changes, similar to applying to SGK and the tax office, the address change must be submitted to the Turkish Patent and Trademark Office for Intellectual property rights through the relevant attorneys.
Journal entry of the rights account will be as follows:
------------------------- / ---------------------------
260.01.00001 - "x" Trademark Application - Turkey 1,000 TL
191.01.00001- Deductible VAT Account 180 TL
320.01.00001- Relevant Attorney's Office 1.180 TL
------------------------- / -------------------------------
Last word; Your brand, which you have spent and invested in for years, may not be transferred during liquidation and may be left out of the process.
Erdal Şölen
Financial Affairs Director
erdal.solen@destekgroup.com.tr