Can I write off Goodwill balance?

Can I write off Goodwill balance?

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Company incorporated in 2008 ( In response to Gordon Brown's 0% CT band con) with an agreed goodwill figure of £18,750. Balance before any amortisation for year to be finalised  (31/3/2011) is £4,570. Last year's turnover a mere £9,000. Any amortisation charge is not allowable for tax relief so needs to be added back in tax comps.

Only have two CT clients so do not relish having to purchase yet more software. Got caught out this year with HMRC's online CT600 not allowing adjustments re disallowable amortisation, would like to correct for future years if possible. Given that I believe the usual writedown period is 5 years can I write off the balance in one lump on the 31/3/11 accounts?

Also got caught out this year by the revenues apparent generosity re the £75 filing online incentive. You guessed it, no facility to write back on the free HMRC facility either. - that really is shameful!

Anyway if anyone could advise re goodwill query would be grateful.

Thanks

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John Toon
By John Toon
15th Apr 2011 12:00

Goodwill impaired

The usual write down period for goodwill is dependant on the company's accounting policies although UK GAAP does put a limit on the expected useful economic life of goodwill at 20 years.

However, the directors have a responsibility to review assets for impairment if they believe certain conditions are met. Intangible assets are also required to be reviewed within 12 months of being recognised on the balance sheet.

If the company directors believe the goodwill is impaired then it can be written down or written off.

The key indicators of impairment of an asset are:

losses in the business attributable to the asset

a decrease in the expected future cash inflows in relation to the asset

a decrease in market value (not really relevant)

 

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By bstock
15th Apr 2011 13:44

Thanks johnt27

           ..  that's given me something to ponder.

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