FRSSE 2015 AND AMORTISATION OF GOODWILL

FRSSE 2015 AND AMORTISATION OF GOODWILL

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FRSSE 2015 incorporates the assumption that the useful life of goodwill and intangibles will not exceed 5 years when an entity is unable to make a reliable estimate of the useful life.

Following recent company law changes the equivalent presumption has been increased to ten years in FRS 102 section 1A and FRS 105 (both effective periods commencing 1/1/16 with early adoption available).

If an entity is applying FRSSE 2015 for say a period commencing 1/1/15, does the revision to a 10 year presumption apply or is it still caught by the original 5 year rule?

Thank-you in advance for any thoughts or answers on this.

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By User deleted
28th Aug 2015 10:23

Where FRSSE 2015 applies, and where the entity is unable to fix a finite life, the max life is 5 years. However, given that from 01/01/2016 you will either be following FRS 102 or 105 (FRSSE  having gone dinosaurs way!) and since both follow max 10 years' life, you're better off following 10 years and adequately disclosing it in the accounts. I think FRED 59 allows it - need to check.

Edit: Or better still, ignore FRSSE 2015, once for all and adopt FRS 102 or FRS 105 early in 2015. There is no point in using FRSSE 2015 just for one year.

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