if Co A buys the trade and assets of Co B can the sale proceeds be split to separate out the proceed so much for the website/brand/logos, so much for the customer list and so much for goodwill. Company's B balance sheet includes purchased goodwill pre 1st April 2002 and there are some accumulated trading losses in Co B
Replies (13)
Please login or register to join the discussion.
Well the losses won’t be available if it is an asset sale. What is your position, who are you advising, Company A?
Depends on the accounting standards. Under IFRS it's mandatory to value identifiable intangibles and to fair value the 'normal' assets acquired. Any difference between the aggregate of the fair values and consideration is goodwill.
FRS102 has similar requirements - see section 18.
Both IFRS and FRS are readily available without charge online. Mr Farrow - did it occur to you to search for these yourself?
Splitting the values of the assets is mandatory.
The problem is usually putting fair values on all these assets - which is generally nothing more than one man's opinion as opposed to another.
Everything mentioned above can be valued separately.
And, of course, they may have different useful lives.
Won’t Company A have a UK PE now? Why have UK- non-UK - UK. There is bound to be some tax leakage.
OK thanks. So where is the UK tax/accounting issue, who are you working for? If there is no longer a UK business then what do you do and why do you mention B’s losses?