Just had a look at a set of accounts for a similar sized practice to ours. The intangible fixed assets have never been amortised. Also the property has been revalued which is unusual but obviously strengthens the balance sheet.
I was under the impression that goodwill had to be amortised over a maximum of 20 years. Am I missing something here?
Replies (12)
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Who will care?
Not the right answer, but Companies House won't notice and HMRC won't care as long as the tax is correct (presumably it is pre 2002 goodwill so no tax relief due anyway).
The accountant does not want to write it off as it will reduce the divi he can declare, so not correct but who is going to put him straight?
Discovery>
If the accounts are not compliant then perhaps HMRC have the option of discovery ??
Discovery of what?
The starting figure on the tax return, profits in accordance with GAAP (before adjustments) is not correct ??
Following on from Smith v HMRC
Not seen one, just a thought door may be open ?
The loss of tax
May be as mentioned above ? an overdrawn loan account or worse caused by overpaying unlawful dividends ?
Professional Body
Might the accountant's professional body be interested that their member's company accounts don't comply with GAAP?
you might think so
Might the accountant's professional body be interested that their member's company accounts don't comply with GAAP?
But that's a No again!
In fact nearly all rules (criminal sanctions or not) seem to be voluntary !
In my experience
The only people that will express an iota of interest in this are the professional body of the firm preparing the accounts.
Companies House will not bother and I can't see HMRC complaining (or trying to understand what they are complaining about).
Waht does the accounting policy say?
There should be an accounting policy disclosed. (Is the practice a limited company?)
As others have said, maybe it's pre 2002 goodwill so no tax relief due so no point in writing off the goodwill. Impairment review might show that goodwill has not reduced so why amortise it?