Goodwill is an intangible asset that arises when a company acquires another for a price exceeding the fair value of its identifiable net assets. The excess — reflecting reputation, customer relationships, and brand — is recorded as goodwill on the balance sheet.
UAE companies preparing financial statements under IFRS account for goodwill under IFRS 3 (Business Combinations). Goodwill is not amortised; it is tested annually for impairment.
Goodwill impairment charges are generally not deductible under UAE Corporate Tax rules. This can affect taxable income — consult a tax advisor before recognising large impairment charges.
Finanshels provides acquisition accounting support, goodwill calculation, and annual impairment testing. Our CFO services include full IFRS-compliant financial reporting.
