# Goodwill Amotrization for Sole Trader



## ELFijka (22 Apr 2010)

Hi!

Just want to clarify; can you actually amortize goodwill if you are sole trader? (I believe you can if you acquired business from another sole trader)

And in how many years you can amortize it for the tax purpose?

Thanks everybody.


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## Joe_90 (22 Apr 2010)

If you purchase goodwill it will be included in your balance sheet.  You would amortise it over 20 years for accounting purposes.
It is not deductable fot tax purposes.


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## ELFijka (22 Apr 2010)

Joe_90 Thans for reply.

So if lets say fair value of assets of the company on the moment of sale was worth €20,000 but business was sold for €100,000, €80,000 / 20 years = €4,000 can not be written off P&L? 

For some reason I thought it works same way as depreciation but it seams that I am wrong...

If that is possible could you please post a link to the corresponding FRS or at least something where this is explained in better detail.

Thank you very much.


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## WindUp (22 Apr 2010)

When Joe says ammortise, he means write off to the P&L- This is fine under Irish GAAP , however it is not allowable as a tax deduction and will be added back in your tax comp


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## ELFijka (22 Apr 2010)

Thanks! Now it makes more sence but...



WindUp said:


> however it is not allowable as a tax deduction and will be added back in your tax comp



Any chance to get a link to the standard where I can read about this, smth is still not clear to me...


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## WindUp (22 Apr 2010)

For the accounting treatment, just google FRS10,,,

Edit, just reread your post -- tax treatment is not governed by standards,  i dont have a link here right now, but it should be somewhere in the tax consolidation act

Edit 2

from the notes on the back of a CT1, corp tax return

2.51 Depreciation, Goodwill / Capital write-off – Depreciation is depreciation of business assets provided for during the
accounting period. It should be added back in the adjusted profit computation. Goodwill /Capital write-off relates to any
write-off of the value of assets during the accounting period. It should also be added back in the adjusted profit computation.

treatment is similar for a soletrader I imagine, but someone else might confirm


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## Ants09 (23 Apr 2010)

link to site regarding frs 10 goodwill and intangible assets 

[broken link removed]

the standard is 83 pages long so enjoy reading


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