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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets: notes on accounting practice: FRS11/IAS36


The objective of FRS11 is to ensure that:

  1. Fixed assets and goodwill are recorded in the financial statements at no more than their recoverable amount.
  2. Any resulting impairment loss is measured and recognised on a consistent basis.
  3. Sufficient information is disclosed to enable users of the financial statements to understand the impact of the impairment on the financial position and performance of the reporting entity.


FRS11 applies to all financial statements that are intended to give a true and fair view of an entity’s financial position or profit/loss for a period. There is anexemption for smaller enterprises applying the FRS for Smaller Entities, see CIRD30525.

The requirements of FRS11 apply to purchased goodwill that is recognised in the balance sheet and all fixed assets, except:

  1. fixed assets within the scope of this FRS addressing disclosures of derivatives and other financial instruments,
  2. investment properties as defined in SSAP19 ‘Accounting for investment properties’,
  3. an entity’s own shares held by an ESOP and shown as a fixed asset in the entity’s balance sheet under UITF 13 ‘Accounting for ESOP Trusts’; and
  4. costs capitalised pending determination (i.e. costs capitalised while a field is still being appraised) under the Oil Industry Accounting Committee’s SORP ‘Accounting for oil and gas exploration and development activities’.

Many investments are covered by the Accounting Standards Board’s project on derivatives and other financial instruments and hence are excluded from this FRS. However, investments in subsidiary undertakings, associates and joint ventures are excluded from the scope of that project and are, therefore, included within the scope of this FRS.

FRS11 does not apply to purchased goodwill that was written off to reserves under SSAP22 ‘Accounting for Goodwill’ (a precursor standard to FRS10) and which has not been recognised on the balance sheet under FRS10 ‘Goodwill and Intangible Assets’.

Valuation of assets

Where valuation of intangible assets is an issue see CIRD10240.


The equivalent IAS standard is IAS36. No departures from FRS11 that are material for CTA09/PART8 have been noted.