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Purchase of a client/customer list from competitor

  • 20-09-2016 10:16PM
    #1
    crawls
    Registered Users, Registered Users 2 Posts: 7 ✭


    When a company buys clients from a competitor (the competitor is not closing down but entering a different business area), is that purchase treated as an intangible asset? There is no guarantee these clients will stay with the company, if they do the purchasing company will receive an annual fee from the customers. Thanks for any help


Comments

  • #2
    s15r330
    Closed Accounts Posts: 942 ✭✭✭s15r330


    crawls wrote: »
    When a company buys clients from a competitor (the competitor is not closing down but entering a different business area), is that purchase treated as an intangible asset? There is no guarantee these clients will stay with the company, if they do the purchasing company will receive an annual fee from the customers. Thanks for any help

    Customer lists are intangible assets once it is probable that future economic benefits will flow to the entity and once the cost of the asset can be measured reliably


  • #3
    crawls
    Registered Users, Registered Users 2 Posts: 7 ✭crawls


    s15r330 wrote: »
    Customer lists are intangible assets once it is probable that future economic benefits will flow to the entity and once the cost of the asset can be measured reliably

    Thanks. That's what I thought. They paid a precise amount for and there will economic benefits so it's definitely an intangible asset. Am I right in saying they can claim capital allowances on amount paid.


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