SCHEDULE 2BANKING COMPANIES: COMPANIES ACT INDIVIDUAL ACCOUNTS

PART 2ACCOUNTING PRINCIPLES AND RULES

SECTION BHISTORICAL COST ACCOUNTING RULES

Fixed assets

Goodwill28

1

The application of paragraphs 23 to 26 in relation to goodwill (in any case where goodwill is treated as an asset) is subject to the following.

2

Subject to sub-paragraph (3), the amount of the consideration for any goodwill acquired by a company must be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.

3

The period chosen must not exceed the useful economic life of the goodwill in question.

4

In any case where any goodwill acquired by a company is included as an asset in the company’s balance sheet there must be disclosed in a note to the accounts—

a

the period chosen for writing off the consideration for that goodwill, and

b

the reasons for choosing that period.