CIRD11135 - Intangible assets within CTA09/PART8: asset conditions: unimportance of distinction between goodwill and intangible asset

Borderline between goodwill and intangible assets

The dividing line between ‘goodwill’ and particular intangible assets or intellectual property, as defined for accounting purposes, may often be difficult to establish. On analysis for example the value of the goodwill of a business may arguably reside in particular individual assets such as customer lists or various forms of know-how.

For accounting purposes, however, little turns on whether assets close to the borderline fall on one side or the other. The provisions UK GAAP are likely to apply to such assets in the same way whether they are classified as goodwill or as a separate intangible asset. There are differences in the treatment under IAS38. See CIRD30530.

Similarly, the rules in Part 8 do not place any significant weight on the distinction.