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Where a loss is recognised in determining a company's profit and loss in respect of capitalised expenditure on an intangible fixed asset, either by way of amortisation or as a result of an impairment review, a debit can be recognised for tax purposes¹. For the meaning of expenditure see D1.626.

If the capitalised asset is goodwill or a customer related intangible asset the availability of relief for any debits depends on the date of acquisition or creation and further details are set out in D1.629A–D1.629C.

An impairment review compares the asset's recoverable amount to its carrying value in the accounts. If the recoverable amount is less than the carrying value an impairment loss is recognised. The legislation specifically excludes from an impairment review the initial valuation of an asset after acquisition for the purpose of determining the amount of expenditure to be capitalised in the first place². This means that the exercise of allocating fair values to assets on acquisition cannot give rise to a tax loss.