Good afternoon guys,
I have barely had any exposure to Goodwill in the past, but recently attended an IFRS for SME's update, which got me thinking.
I have a client who started a Close Corporation in 2009. The last financials done was in 2012. As GAAP was done away with in December 2012, the client will have to comply with IFRS for SME's from 2013.
They did not provide amortisation in the past, but according to the guidelines:
"If an entity is unable to make a reliable estimate of the useful life of an intangible asset, the life shall be presumed to be ten years."
Therefore, as far as I understand, a note has to be included in the financials, specifying that this is the first year the IFRS for SME's has been applied, and then there should be a "transitional" note, explaining that goodwill is now already depreciated for 4 years (2010,2011,2012+2013), and the carrying amount will therefore be 60% of the cost.
Does this make sense to anyone, or do you haven any feedback in this regard?