PracticeConsultingBusiness – Goodwill first

Business - Goodwill first

A Cheltenham-based building group has become the first company to throw into reverse the goodwill and intangible assets accounting standard FRS10, and has used it to deflate the balance-sheet and boost profits.

Last year, Britannia Group discovered #1.2m of negative goodwill during the buyout of a rival company. Britannia decided to use FRS10 and include a #1m negative intangible asset, although the rule did not take effect until April.

David Errington, the company?s group financial controller, said: ?After a fair value exercise we decided negative goodwill applied to the transaction.?

Edinburgh-based accounts monitor Company Reporting said: ?While many companies are unhappy profits will be hit by large goodwill depreciation charges, the depreciation of negative goodwill increases profit; in Britannia?s case, as a #150,000 reduction to operating expenses.?

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer