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Want to Write Off Goodwill Over a Shorter Term? Embrace the New FRSSE

Life and business is all about winners and losers.

Yesterday, we saw how the new Financial Reporting Standard for Smaller Entities (FRSSE) is going to make losers out of those who want their goodwill to last and last.

Today, we look at those lucky companies who are buying goodwill from a third party (or that was created after April 2008) that they want to write off as quickly as they can so as to accelerate tax relief.

When the existing maximum term for the life of goodwill is 20 years, you may have felt unsafe gambling on a shorter life for tax purposes.  From 2015, the new FRSSE says the maximum life for goodwill should now be 5 years.

Now, as HMRC have to accept the tax result of properly applied accounting standards, they will have to accept 5 years.

Time to fill yer boots.

And if you think that 2015 is going to come too late for you, any new accounting standard always says “early adoption is encouraged”!

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