I have been asked to dispose of Goodwill as the item has been sitting in the BS for years evading the auditors but the time has come to write it off but wanted to double check if my journal entries are correct.
Goodwill cost = £210,000
Goodwill amortisation charge = £152250
We have several account in the balance sheet which I suspect are all relics from a very old chart of accounts and as far I know have never been used. I know from disposing of fixed assets with similar accounts we don't like to use this as my boss likes the BS to be tidy.
Goodwill disposal
Goodwill Amortisation on Goodwill Disposed
Based on this would it be correct that I can just
CR Goodwill cost £210,000
DR Goodwill Amortisation Charge £152250
DR profit/loss on Disposal (P&L) £57,750 - I am not sure as I can see no other account specifically for profit/loss on Goodwill (In the past with disposal of FA's my boss has preferred any profit/loss to be posted to the depreciation charge in the P&L rather than profit/loss account though I don't quite understand why).
Thanks
-- Edited by Twinkle on Friday 20th of February 2015 01:47:25 PM
