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Accounting for Goodwill

  • 11-09-2013 09:19AM
    #1
    paulpd
    Registered Users, Registered Users 2 Posts: 172 ✭✭


    How do you go about increasing the value of Goodwill in accounts? Say a client has goodwill in the balance sheet of €48k based on a client list of 5 years ago. They now value this at closer to €250k. From memory I don't think you're now permitted to increase it? Or if you are permitted, what are the journals?

    It's the first time I've seen Goodwill in years!

    Thanks a lot.


Comments

  • #2
    lclohessy
    Registered Users, Registered Users 2 Posts: 22 ✭lclohessy


    paulpd wrote: »
    How do you go about increasing the value of Goodwill in accounts? Say a client has goodwill in the balance sheet of €48k based on a client list of 5 years ago. They now value this at closer to €250k. From memory I don't think you're now permitted to increase it? Or if you are permitted, what are the journals?

    It's the first time I've seen Goodwill in years!

    Thanks a lot.

    Internally generated goodwill is never recognised in the financial statements

    Externally purchased goodwill is held at cost with no recognition for the increase in the net realisable value

    No journal would be necessary as it should at held at cost


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