Amortization of Acquisition Costs (SF.IS.AmortAcqCosts_Banks)
Amortization of Acquisition Costs (SF.IS.AmortAcqCosts_Banks) refers to the value of capitalized company acquisition costs (goodwill) that have been allocated to the current accounting period. Goodwill is the excess of the price paid for the purchase of a business over the fair market value of its identifiable tangible and intangible assets, less liabilities. Amortization of goodwill consists of the periodic reduction of the premium paid in the acquisition over the company’s value.
The amortization of goodwill is no longer permitted by IFRS and by the U.S. GAAP. However, it is allowed in many local accounting standards.
Amortization of Acquisition Costs (SF.IS.AmortAcqCosts_Banks) refers to the cost reported on the face of the income statement, or in the notes to the income statement If, in case, the full value of the goodwill amortization cannot be disclosed on the face, it is shown in the supplemental footnote (Amortization of Acquisition Costs, Supplemental (SF.Notes.IS.AmortofAcquisitionCostsSuppl)).
Amortization of Acquisition Costs (SF.IS.AmortAcqCosts_Banks) includes:
- Amortization of the excess of the purchase price over the value of acquired companies (amortization of goodwill)
- Amortization of the excess of the value of acquired companies over their purchase price (amortization of negative goodwill)
Amortization of Acquisition Costs (SF.IS.AmortAcqCosts_Banks) does not include:
- Amortization of capitalized R&D costs and other intangibles acquired through a business acquisition, if these assets are still disclosed as intangibles (different than goodwill) on the balance sheet following the acquisition (classified as Amortization of Intangibles (SF.IS.AmortIntangibles_Banks))
- Items labeled as amortization of goodwill/acquisition costs, disclosed by companies reporting in the IFRS, in the U.S. GAAP or other accounting standards that do not allow the amortization of goodwill (classified as Other Unusual Expense (SF.IS.OtherUnusualExp_Banks))
- Impairment of goodwill/acquisition costs (classified as Other Unusual Expense (SF.IS.OtherUnusualExp_Banks))
- Negative goodwill recognized (classified as Other Unusual Income (SF.IS.OtherUnusualIncome))