Revaluation of goodwill

TreadStoneTreadStone Feels At HomeAAT Licensed Accountant Posts: 247
Putting together final accounts for a new client (acquired from another Accountant).

Pretty standard Ltd Co with husband & wife directors/equal shareholders. Goodwill on BS showing as £100k. No issues so far.

A few queries relating to fixed assets have led me to take a look at older accounts. Jump to 2006 (incorporation) and Goodwill additions of £100k. This has then been amortised evenly @£10k pa for 5yrs until 2011 & 2012 when there are entries of £30k & £20k respectively to Revaluation Reseve boosting Goodwill back to it's original £100k.

I didn't think was allowed under FRS10. There hasn't been any changes in this time (eg a new director coming in with £x worth of contracts etc) that may explain the entries and the previous Accountant is frugal with supplying information to say the least.

I'm also assuming this isn't acquired goodwill but the amount agreed on incorporation.

Has anyone come across this before ?

Comments

  • Bmer82Bmer82 PlymouthFMAAT Posts: 56
    only if there is an ascertainable market value should G/W be revalued under FRS10. of course it is rare that G/W can be valued unless you have a firm acquisition offer
  • Bmer82Bmer82 PlymouthFMAAT Posts: 56
    or perhaps there was deemed an error in their amortisation/impairment calculations
  • TreadStoneTreadStone Feels At Home AAT Licensed Accountant Posts: 247
    Bmer82 said:

    or perhaps there was deemed an error in their amortisation/impairment calculations

    That would seem odd given that amortisation had been applied evenly @ £10k pa for 5 year before the changes.

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