Good news about goodwill

Your comments are perfectly valid. If you have not made a recent acquisition, and are not relying upon goodwill as an asset on your balance sheet, then it is not an issue.

Looking at the bigger picture, and stating the obvious, brokers will fall into two categories, those who have the problem, and those who do not. We can safely park the ones without, as it would be reasonable to assume that those in that category would not now make a purchase without ensuring that the structure of the deal was such that they did not have that problem looming at the end of the year. No doubt one or two such deals might wriggle through but if they do, one would have to question the quality of advice from the accountancy firm advising the acquirers.

Turning now to those who have made acquisitions. Our general experience is that the issue has been recognised, and the problem is being managed so that the rules will not be infringed from next year.

You may rest assured that the serial acquirers, or consolidators as the market calls them, have structured their businesses in such a way as not to expose the balance sheet of the trading broking company to this issue. This will often be done by the use of a holding company or other quite legitimate arrangements, so do not expect gasps of horror from the city boardrooms come the end of the year.

While firms like yours may not grow by acquisition, the reality is that many small firms have survived and prospered for many years without once entering the wonderful world of mergers and acquisitions.