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Business combinations and goodwill under new UK GAAP

Section 19 of the accounting standard FRS 102 covers business combinations and goodwill. On this page you can access a range of articles, books and online resources providing useful links to the standard, summaries, guidance and news of recent developments.

General guidance and information on the accounting standard is available from our FRS 102 page.

Business combinations and goodwill were dealt with in a number of different accounting standards under old UK GAAP, including FRS 10, FRS 6 and FRS 7. These standards have been superseded by FRS 102.

What's on this page?

  • Full-text standard
  • Model accounts
  • Guidance and support from ICAEW
  • eBooks
  • Guides
  • Online articles
  • Articles and books from the Library

Contact the Library

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Full-text standard

FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland
As issued by the Financial Reporting Council (FRC) in September 2015. This updated edition incorporates amendments issued in September 2014, February 2015, March 2015 and July 2015. Business combinations and goodwill are covered in Section 19.

More information and links to previous versions and amendments are available on our main FRS 102 page.

Model accounts

Model accounts and disclosure checklists for new UK GAAP
The ICAEW Library can provide model accounts and disclosure checklists for FRS 101, FRS 102, FRS 102 Section 1A, FRS 103 and FRS 105. The examples and checklists cover a broad range of entities, including small companies, charities, groups, LLPs and micro-companies.

ICAEW guidance and support

FRS 102: Accounting for intangible assets and goodwill
This helpsheet addresses some of the commonly asked questions on intangible assets and goodwill:

  • When should I recognise an intangible asset separately from goodwill in a business combination?
  • How should I account for software and website development costs?
  • What is the maximum useful life for intangible assets and goodwill?
  • Can I avoid amortising an intangible asset by concluding that its residual value is equal to or greater than its current carrying value?
  • Can I revalue intangible assets under FRS 102?

FRS 102: Accounting for a hive up
The term hive up is commonly used to describe a type of restructure within a group of companies when the net assets of, and business undertaken by, a subsidiary are transferred up into the parent company. This helpsheet addresses key issues with several examples.

The new UK GAAP
ICAEW's financial reporting portal offering practical resources on the new regime, including guidance factsheets and FAQs covering key topics.

Ask ICAEW Technical Advisory Service

Get an opinion from the experts. Our experienced technical advisors can help you with your new UK GAAP questions and offer practical advice. Call the advisory helpline on +44 (0)1908 248 250.

Questions we've dealt with recently include:

  • What do I do with goodwill on transition to FRS 102?
  • Can I do merger accounting under FRS 102?
  • When do I have to apply FRS 102 to my UK company client?
  • How does FRS 102 impact charities?

Find out more about the Technical and ethics advisory helpline, including our opening hours.

Financial Reporting Faculty

Financial Reporting Faculty
The faculty offers assistance and support in IFRS, UK GAAP and other aspects of business reporting. It offers technical briefings and factsheets, IFRS and UK GAAP standards-trackers, plus practical advice from industry experts and working accountants.


The Library provides full text access to a selection of key business and reference eBooks from leading publishers. eBooks are available to logged-in ICAEW members, ACA students and other entitled users. If you are unable to access an eBook, please see our Help and support advice or contact library@icaew.com.

Interpretation and application of UK GAAP for accounting periods commencing on or after 1 January 2015
Steve Collings (2015)
A detailed, practical guide to applying UK GAAP with specific sections covering:

  • Summary of the key differences between FRS 102 and ‘old’ UK GAAP: Goodwill and intangible assets
  • Consolidated and separate financial statements: Goodwill in a business combination
    Includes an example calculation of goodwill, example consolidation schedule and discussion of negative goodwill.

UK GAAP financial statement disclosures manual
Steve Collings (2016)
A practical manual for preparing new UK GAAP-compliant disclosures. This guide collects all of the latest guidelines into one place and is designed for practical application with many real-world examples. The chapter on financial investments covers:

  • Investments in associates
  • Investments in joint ventures
  • Disclosure requirements: investments in associates
  • Disclosure requirements: investments in joint ventures.

UK GAAP 2017: Application of FRS 100–104 in the UK
EY (2017)
This guide has been fully updated to reflect the application of the new accounting standard in practice. It focuses on each area of the financial statement in detail and explains how they are treated by FRS 102, with illustrative examples. The chapter on business combinations and goodwill covers:

  • Key differences between Section 19 and IFRS
  • Requirements of Section 19 for business combinations and goodwill
    Including objective and scope, identifying a business combination, purchase method, identifying an acquirer, measuring the cost, allocating the cost, non-controlling interests, goodwill, reverse acquisitions, business combinations achieved in stages (step acquisitions).
  • Disclosures relating to business combinations and goodwill
  • Group reconstructions
  • Summary of GAAP differences.


Some guides and comparisons that we link to may pre-date the latest amendments to this standard. While these resources contain useful information, please treat them with appropriate caution.

Fact Sheet 6 – FRS 102: Business Combinations
FRC, December 2018
Staff factsheet giving a high-level overview of the requirements for entities applying FRS 102 that undertake a business combination for the first time. It provides an outline of the purchase method, discusses the separation of intangible assets from goodwill, and presents several illustrative disclosures.

Staff Education Note 15: Acquisitions and disposals of subsidiaries
FRC, December 2013
Guidance note produced by the FRC comparing the accounting treatment for acquisition and disposal of subsidiary entities under FRS 2, FRS 6, FRS 10 and FRS 102.

FRS 102 on goodwill and its useful economic life
Business Edge article from BDO, published in October 2013, giving an overview of differences in determining the useful economic life of goodwill under FRS 102.

Financial Reporting Standard 102: Business combinations, goodwill and other intangible assets
Factsheet produced by Crowe Clark Whitehill reviewing the changes to business combinations, intangible assets and research and development. Published in September 2013.

Business combination accounting under FRS 102
Business Edge bulletin from BDO, published in July 2013, examining three key changes to accounting for acquisitions under new UK GAAP.

Online articles

The Library provides access to leading business, finance and management journals. These journals are available to logged-in ICAEW members, ACA students and other entitled users subject to suppliers' terms of use.

Articles are available to logged-in ICAEW members, ACA students and other entitled users.

Articles from other sources

FRS 102: Consolidated financial statements
AccountingWEB, June 2017
Detailed article by Steve Collings, with examples, discussing changes to group accounts under FRS 102. It covers further investment into a subsidiary and disposals of ownership interest.

FRS 102: accounting for asset impairment and goodwill - tips and advice
CCH Daily, January 2017
Helen Lloyd FCA reviews accounting for impairment of assets and goodwill, highlighting key differences between the new FRS 102 Section 27 Impairment of Assets and former FRS 11 Impairment of Fixed Assets and Goodwill. Available online to Accountancy Daily subscribers or in print from the Library.

Choosing the right FRS: Accounting for business combinations - part 1
CCH Daily, September 2015
In the first of a series on UK GAAP transition, Helen Lloyd FCA considers the most appropriate accounting standard for business combinations based on the myriad choices of FRSs 101, 102 or 105, and in certain circumstances even IFRS. Available online to Accountancy Daily subscribers or in print from the Library.

FRS 102 case study 3: Tax, cashflow and mergers
CCH Daily, April 2015
Part three of the series on FRS 102 assesses accounting issues for tech start-ups and business combinations, particularly the changes to treatment of tax reporting under the new UK GAAP. Available online to Accountancy Daily subscribers or in print from the Library.

FRS 102 and goodwill amortisation
Article from AccountingWEB by Steve Collings explaining the differences in how goodwill is treated in FRS 10 and FRS 102. Published June 2014.

FRS 102: Part 10 - Impairment reviews
CCH Daily, March 2014
Tenth and final part in a series examining where FRS 102 varies from current UK GAAP. It contrasts the requirements of the new standard with those of FRS 11 Impairment of Fixed Assets and Goodwill and FRS 10 Goodwill and Intangible Assets regarding the basic calculation of an impairment loss, allocation of impairment charges to assets (including worked example) and reversal of impairment losses. Available online to Accountancy Daily subscribers or in print from the Library.

FRS 102: Part 4 - Business combinations
CCH Daily, October 2013
Fourth in a series of articles exploring where FRS 102 differs from current UK GAAP. The author discusses section 19's requirements for business combinations and defines the remit of the standard. Includes a worked example detailing treatment of post-acquisition adjustments. Available online to Accountancy Daily subscribers or in print from the Library.

Articles and books in the Library collection

To find out how you can borrow books from the Library please see our guide to book loans. You can obtain copies of articles or extracts of books and reports by post, fax or email through our document supply service.

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