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How to account for book of business acquisition

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Quite a simple one, but I've no background in this area.

The company in question will be purchasing a book of business next year. It will pay £265,000 in total. £130,000 will be paid upfront, and the remaining £135,000 will be paid over three instalments of £45,000 each year.

Just need to make sure it's entered into the balance sheet correctly, and if there are different accepted ways in which this is done?

 

Thanks

Jim

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By paul.benny
06th Sep 2019 11:04

Have you tried looking at the relevant standard? UK accounting standards are freely available from the FRC website (and IFRS from the IFRS website). Assuming you're reporting under FRS102, it's section 19.

It looks like the consideration may all be goodwill but as the facts provided are very limited, so too is the response.

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By Accountant A
06th Sep 2019 11:53

I would definitely speak to your accountant about this.

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Hallerud at Easter
By DJKL
06th Sep 2019 12:53

A debit to "Post, stat & publications"

I know accounting and technical books are becoming expensive but £265,000 is really pushing it, even for say Tolleys.

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Replying to DJKL:
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By Clinton Lee
09th Sep 2019 23:28

:)

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