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A small company purchased goodwill of £50,000 some six years ago, and on a recent professional valuation it was valued at £150,000. All other assets are also worth at least book value.

The directors have asked this to be reflected in the accounts to show the re-valued amount in the balance sheet. I can find no objection to this provided it has an appropriately worded note in the balance sheet, and the goodwill is professional valued on a regular basis, to be consistent.

Are there any accounting standards that say small companies cannot revalue goodwill, and reflect that in the balance sheet?


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By pawncob
18th May 2010 21:29

Quite the reverse

If you want to show a true and fair view of the company's position, you SHOULD revalue Goodwill ( and all other assets) on a regular basis. Having the freehold valued at cost (in 1955) is not good accounting!

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By Anonymous
19th May 2010 10:12

FRS 10

I'd refer you to paragraphs 43-45 of FRS10, found on the following link


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19th May 2010 10:46

Revaluation - Yes we can!!

Thank you both for your replies. Very much appreciated.

It is clear then, goodwill with a readily ascertainable value, can be revalued. The directors need to review this regularily.




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By Anonymous
21st May 2010 17:32

Revaluing goodwill

I am surprised by the answers suporting revaluation.  You need a readily ascertainable market value to do so.  The definition in FRS 10 requires the asset to be part of an homogenous group and that frequent transactions take place.  Goodwill is unique and can never be part of an homogenous group of assets.  It cannot have a residual value other than zero for the same reasons. Fishing quotas/licences or airline landing slots may be examples of homogenous assets but not goodwill.  Historic cost I'm afraid is all you can use.

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21st May 2010 17:53

Small Company Goodwill - to re-value or not to re-value

Thank you anon.

That is the dilemma, i've read both schools of thought, regarding small companies.

Thank you for your input.

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