FRS102

UK GAAP (Generally Accepted Accounting Practices) recently adopted a new Financial Reporting Standard number 102.

This allows an interesting approach to Good Will, Internally generated goodwill can now be capitalised and amortised over its useful life. If a project is made up of Research and Development phases then the Development phases costs (but not the Research part) can be capitalised. This is useful when combined with an R&D Tax credit claim as it means research costs are reduced by the Tax claim and Development costs can be spread over time, reducing the effective charge to the P&L account of any development expenses.

Its a welcome approach and will benefit a lot of companies, particularly as the increase to 12% allowance in the recent budget is sure to spur more companies to consider R&D

A provider I use a lot to check company accounts is called Reporting Accounts they provide a free service at present but are looking into a paid version also.

I deal with many clients with UK operations so this FRS is very helpful