What is Copyright?
Copyright is an exclusive legal right granted to the creator of an original literary, artistic, software, or other creative work, allowing reproduction, distribution, performance, and adaptation, recognized as an intangible asset when acquired or licensed.
How It Works
- Purchased copyright: capitalized at acquisition cost.
- Internally generated: not recognized (research phase) or capitalized under IAS 38 development phase rules.
- Amortized over the shorter of legal protection and useful economic life.
- Tested for impairment when indicators arise.
Saudi Context
Saudi copyright is governed by the Copyright Law administered by SAIP, providing protection for the life of the author plus 50 years (75 years for collective works). Saudi publishers, software companies, and media producers (MBC, Telfaz11) recognize acquired copyright as an intangible asset and amortize it over its expected revenue-producing period.
Example
A Saudi publisher buys the Arabic-language rights to a foreign book for SAR 400,000 over a 10-year contract. Capitalized as a copyright intangible: Dr Copyright 400,000, Cr Cash 400,000. Amortized straight-line: SAR 40,000 per year.