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Study Notes

Non-Current Assets – Goodwill and Intangible Assets

AS, A-Level
AQA, Edexcel, OCR, IB

Last updated 13 Nov 2023

Occasionally you will see reference in a balance sheet to "goodwill and intangible assets".

Normally a business cannot recognise in its accounts the value of intangible assets that the business has. These might include:

  • The know-how and experience of staff and management
  • The value of brands and customer loyalty
  • Reputation for quality in the market

The reason for this is simple – any such value is highly subjective, and could easily be manipulated.

There is one exception, however. A business can record in the balance sheet the value of intangible assets that it has actually bought. For example, if it pays £250,000 for the right to use a brand name, then it can record that as an intangible asset at cost

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