Forum Archive Index - August 2000

["Wedde, John" <john.wedde@cit.ac.nz>]

Brian & Mike

The payout for Goodwill is indeed a once off. However Goodwill is then in
the books as an asset.  It is not expensed completely in the year it is
"acquired". It is progressively amortised [depreciated] over the period of
its useful life. You're correct Mike, Goodwill will be expensed in small
chunks over a period of time.
This at least is my understanding.
Cheers
John



                -----Original Message-----
                From:   Mike Hudson [mailto:MHudson@placemakers.co.nz]
                Sent:   Wednesday, 16 August 2000 11:40
                To:     'sharechat@sharechat.co.nz'
                Subject:        re: re: [sharechat] advantage , the cold
hard facts

                Brian wrote

                " The Goodwill pay-out is a once off. Future bottom line
figures must be
                better. If in fact that high expense had not been there the
overall result
                would have been extraordinary. This appears to have been
what they were
                trying to put over, but as I have said it was stupid because
they couldn't
                (and didn't) get away with it."

                Brian, are you sure that this is a one off? My understanding
of the
                treatment of goodwill is that it is to be amortised over the
period that the
                benefit of the goodwill is expected to be received but not
exceeding 20( ?)
                years. Most companies write off goodwill over the maximum
time at it is
                positive for both profit and asset backing.

                I may be wrong (again!) but it would surprise me if this was
the last of the
                goodwill. 




                Mike  



        
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