The statute provides that ‘goodwill’ carries the same meaning as it does ‘for accounting purposes’, i.e. the legislation follows the definition ascribed under ‘GAAP’. These terms are defined in CTA10/S1127 (see CIRD30020).

As a matter of accountancy, goodwill is simply the difference between the price at which a business changes hands and the aggregate value of the individual assets of that business after deducting the value of the liabilities taken over.

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