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Budget 2021: No Goodwill Depreciation – Impact On M&A
This change will need to be factored in the bid price for M&A presently underway and may end up increasing transaction costs.
10 Feb 2021, 08:03 AM IST ![NDTV Profit](/icons/feather-without-circle.svg)
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![(Image: pxhere)](https://media.assettype.com/bloombergquint%2F2021-02%2Faf14b1aa-47d0-425f-8705-5e49c745b530%2Ffinance_accounting_pen_investment.jpg?rect=0%2C31%2C1200%2C675&auto=format%2Ccompress&w=200)
(Image: pxhere)
Picture an India Inc. boardroom discussion, taking place pre Feb.1, 2021, on a $1 billion business buyout. The business buyout may create $500 million of intangible assets, including an approximate goodwill of $400 million.Will this goodwill be tax deductible? Yes, there is a legal basis for it to be so and, hence, it will give a potential benefit of approximately $100 million.
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