The change is based on force as an expense include 10% of the value of intangible assets (such as brand or client) so that they are amortized over ten years. The modification is a sharp change from the current rules. Since 2016, generally it will be considered a goodwill lose 10% of its value each year, which means that companies will have to account for that amortization as an expense and therefore affect the benefit.
The new Audit Act has made changes to the Commercial Code and Law 27/2014 Corporate Income Tax (LIS) in relation to intangible assets, which may have a significant impact on the benefits of a multitude of companies and ballasting the mergers and acquisitions. The change is based on force as an expense include 10% of the value of intangible assets (such as brand or client) so that they are amortized over ten years. The measure could weigh the benefits and the ability to distribute dividend of small unlisted companies.
The LIS has been modified to adapt to this new regulation and to certify that be amortized and no value adjustment, and that it will be based on the life. Should the useful life of intangible assets can not be estimated reliably or goodwill manner deductible depreciation ceiling presented as annual tax twentieth of its amount.
The new criterion that sets the standard and will enter into force on 1 January 2016 only affects those companies that are subject to accounting plan, so you will have no effect on those governed by international accounting standards. So, the hardest hit businesses will receive small and medium size.
Amortization based on life
This change in the accounting treatment of intangible assets as well as the specific goodwill (applicable to correspond with fiscal years beginning on or after January 1, 2016 financial statements) involves amortized based on life.
With the change, the Government recovers the need to amortize goodwill and states that intangible assets (brands, market share, customer base ...) are assets with a useful life, unless proved otherwise, of ten years.
It is generally considered goodwill lose 10% of its value each year, which means that companies will have to account for that amortization as an expense and therefore reduce the profit.
The change leads to a sharp change from the current law, which requires companies to make an annual impairment test and amortize only goodwill in cases where an impairment loss is detected, as they were considered assets with a indefinite useful life (now, however, will have to be repaid within 10 years).
Therefore, the goodwill from 2016, will be from the point of view:
Accounting: Amortized over a period of ten years, unless proven otherwise. This means you can not be written off and continue the calculation of deterioration, but we have to prove that the fund is not depreciable.
Fiscally: Redeemable at most the twentieth (5%).
The new Audit Act has made changes to the Commercial Code and Law 27/2014 Corporate Income Tax (LIS) in relation to intangible assets, which may have a significant impact on the benefits of a multitude of companies and ballasting the mergers and acquisitions. The change is based on force as an expense include 10% of the value of intangible assets (such as brand or client) so that they are amortized over ten years. The measure could weigh the benefits and the ability to distribute dividend of small unlisted companies.
The LIS has been modified to adapt to this new regulation and to certify that be amortized and no value adjustment, and that it will be based on the life. Should the useful life of intangible assets can not be estimated reliably or goodwill manner deductible depreciation ceiling presented as annual tax twentieth of its amount.
The new criterion that sets the standard and will enter into force on 1 January 2016 only affects those companies that are subject to accounting plan, so you will have no effect on those governed by international accounting standards. So, the hardest hit businesses will receive small and medium size.
Amortization based on life
This change in the accounting treatment of intangible assets as well as the specific goodwill (applicable to correspond with fiscal years beginning on or after January 1, 2016 financial statements) involves amortized based on life.
With the change, the Government recovers the need to amortize goodwill and states that intangible assets (brands, market share, customer base ...) are assets with a useful life, unless proved otherwise, of ten years.
It is generally considered goodwill lose 10% of its value each year, which means that companies will have to account for that amortization as an expense and therefore reduce the profit.
The change leads to a sharp change from the current law, which requires companies to make an annual impairment test and amortize only goodwill in cases where an impairment loss is detected, as they were considered assets with a indefinite useful life (now, however, will have to be repaid within 10 years).
Therefore, the goodwill from 2016, will be from the point of view:
Accounting: Amortized over a period of ten years, unless proven otherwise. This means you can not be written off and continue the calculation of deterioration, but we have to prove that the fund is not depreciable.
Fiscally: Redeemable at most the twentieth (5%).
Spain: New accounting treatment of intangible assets
![Spain: New accounting treatment of intangible assets]()
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