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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Intangilble assets: goodwill
Dear tutor
I have seen the sentense below:
The following items must be charged to expense when incurred:
? internally generated goodwill
? start-up, pre-opening, and pre-operating costs
? training cost
? advertising and promotional cost, including mail order catalogues
? relocation costs
I don’t understand why goodwill can be treat as expense, what is the double entry for it? My understanding is for the group consolidated FS, there is a recognition for goodwill when aquisition happened. for sub, there is none. correct me if I am wrong. but what the above description about? I assume it’s for the group consolidated FS, but how internally generated goodwill becomes an expense?
Many thanks
You are right – internal goodwill is never recognised or expensed or anything – so I would cross that bit of the sentence out.