Sales or acquisitions of businesses are likely to include the transfer of intangible fixed assets such as goodwill and / or other intellectual property.

The accounting definition of intangible fixed assets (IFAs) is set out in FRS 102, s 18 'Intangible assets other than goodwill', and is 'an identifiable non-monetary asset without physical substance'. IFAs have a continuing use in the company's trade.

Goodwill is dealt with in FRS 102, s 19 'Business combinations and goodwill'. Goodwill is measured at cost, defined as the excess of the cost of the business over the acquirer's interest in the net amount of identifiable assets, liabilities and contingent liabilities, measured in accordance with the rules within that section.

Goodwill may be personal, connected with the premises (for example a hotel) or associated with the brand or trade name. There are many other types of intellectual property such as patents, know-how, designs, processes and customer lists.

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