How do I account for the purchase of a business?

I have recently purchased a business as a partnership. The amount we paid was split into two parts. Firstly we bought the stock, and secondly we paid a goodwill payment for the purchase of the business. How do I account for the second goodwill payment.

The advice my accountant gave when we did this was to create a new “purchased goodwill” nominal under assets and liabilities.


I would agree with @ian_roberts and create an intangible asset called goodwill and amortise it over a period of time.

Kind regards,