Client (Ltd Co) has bought a business, unrelated parties etc. Cost 13,500 of which 12k is goodwill, rest is fixed assets and stock.
Legal fees incurred of approx 3k relating directly to the purchase of the business (lease agreement fees dealt with separately), where would you put these on the BS? separate between fixed assets and goodwill? Seems wrong to capitalise as part of goodwill...but they are double the fixed asset price, so also seems wrong?
Thanks
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As part of goodwill. Think about it. Would they have been incurred if he had only bought fixed assets?
You could...
... then immediately impair the goodwill down to the £12K that it's actually worth, thus obtaining relief for the capitalised legal fees. :)