I have a UK holding company that's acquired 100% of a French subsidiary at a bargain price. This is the first year of group accounts - they're only required for UK filing purposes, and they will already be qualified on a number of points.
My question is the treatment of the negative goodwill. FRS 10 allows it to remain on the balance sheet, which I have seen previously in other group accounts. IFRS 3 indicates it should be transferred to the income statement in the period in which it arises.
I haven't seen anywhere that one standard should take precedence, so I seem to have a choice, but no reason to justify one treatment over the other.
Any suggestions or justifications much appreciated.
My question is the treatment of the negative goodwill. FRS 10 allows it to remain on the balance sheet, which I have seen previously in other group accounts. IFRS 3 indicates it should be transferred to the income statement in the period in which it arises.
I haven't seen anywhere that one standard should take precedence, so I seem to have a choice, but no reason to justify one treatment over the other.
Any suggestions or justifications much appreciated.