Innovation Pharmaceuticals Inc (IPIX)

[Brinjal]

The money spent on obtaining a patent are not expensed in the year of spend. Instead, they are capitalized and appear on the asset side of the balance sheet, and carried forward amortizing it equally over the life of the patent. Writing off means, expensing (or amortizing) the full value carried on the balance sheet, thereby reducing your profits (or increasing your losses). The losses in turn are reduced from the Capital on your balance sheet. In short, minus on the asset side and minus on the liabilities side, thus balancing your balance sheet.

This is purely, an accounting treatment. Writing off has no impact on the ownership of the patent which continues to reside with the patent holder. Moreover, no one else can file for a patent for the same product because it will be treated as prior art, which is disallowed under the patent rules.