A Ltd Client of mine has bought a sole trader's business. When I say bought the business it is basically an address book of customer names and they will take over the services provided to those customers. I have read up on amortisation of goodwill on the HMRC website but am not 100% clear.
Can I write it off to P&L in one year or does it have to be done over a few years? I was anticipating it being the latter but there does seem to be stuff on HMRC that says you can write it off in one go. It's only a few thousand pounds so not huge.
Goodwill should be amortised over the useful economuc life of the asset. FRS10 includes a rebuttable presumption that the useful economic life should be 20 years or less. I would be looking to amortise over 4 to 5 years.
