Foreign currency

Foreign currency

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We recently had a file reviewed and one of the comments were in regard to our clients treatment of goodwill. We concurred with the client that purchased goodwill should be capitalised. The next year the client retranslated the goodwill under the net investment method used in SSAP 20 to which we also agreed. Our reviewer has said that retranslation is not permitted in SSAP 20 and we should have left it valued at historic cost and has downgraded our file as a result.
We don't agree with this and wondered if anyone had any thoughts on the issue.

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By George Attazder
17th Nov 2011 13:28

Is it purchased goodwill...

... or goodwill arising on consolidation?  SSAP 20 is perfectly clear that the net investment method only applies to the latter.

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By Ayesha Bham
18th Nov 2011 10:41

No it was purchased goodwill. The technical line said it was ok to retranslate but the reviewer says it isn't. Very confusing.

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