Audit and Technical Partner Leavitt Walmsley Associates Ltd
Share this content guide to goodwill and intangible assets

19th May 2010
Audit and Technical Partner Leavitt Walmsley Associates Ltd
Share this content

Steve Collings outlines the fundamental principles of accounting for goodwill and intangible assets and assess the differences between current UK GAAP, IFRS and the proposed IFRS for SMEs.

As accountants we are all aware that an intangible asset does not have any physical form, which makes accounting for them a major issue. Below is a summary of some of the main problem areas.


The issue of goodwill has always posed problems for accountants. Goodwill can primarily take two forms - purchased goodwill and internally generated goodwill. It's accounted for under the provisions in FRS 10 ‘Goodwill and Intangible Assets’ and IFRS 3 ‘Business Combinations’. 

Under IFRS 3, internally generated goodwill cannot be capitalised. This also appl...

Register now to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day.

Replies (2)

Please login or register to join the discussion.

By [email protected]
21st May 2010 17:25

Amortisation of Goodwill

Hi Steve,

Does your answer below also apply to the  transfer of assets including a professional business valuation for goodwill, to a newly formed limited company from, a sole trader.

Thanks (0)
By topcomcons
22nd May 2010 09:50


Accountancy practices seem currently to be valued at 1.2 times gross recurring fees although there usually is a deferral period and in some instances the management are retained to ensure a smooth transmission.

James Marston 

Thanks (0)