Regulatory Alerts2010-04-18
The Accounting Treatment of Goodwill
Issued by the Central Bank of Kuwait, these circulars require Islamic and local banks to amortize goodwill from controlled shareholdings through annual operating results, with potential extensions up to twenty years. Circular No. 2/BS/175/2005 aligns these practices with International Financial Reporting Standards by mandating regular valuations, external auditor certifications, and detailed financial statement disclosures. These updated accounting procedures govern all goodwill arising from share acquisitions for control purposes and took effect on January 1, 2005.
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