are depreciated over the lesser of the period of the lease and
If the Groupâ€™s interest in the net fair value of the identifiable
the useful life of the asset.
assets, liabilities and contingent liabilities recognised exceeds the cost of the business combination, the excess is recognised
Property, plant and equipment is tested for impairment whenever
immediately in the income statement. Any excess of the Groupâ€™s
there is an indication that the asset may be impaired, in accordance
interest in the fair values of the assets and liabilities acquired
with the requirements of IAS 36, Impairment of Assets.
over the cost of the acquisition was previously recognised as negative goodwill. Negative goodwill was derecognised on
Gains and losses on disposals are determined by comparing
1 July 2004, with a corresponding adjustment to the opening
proceeds with carrying amount and are included in operating
balance of retained earnings.
profit. A gain or a loss on disposal of an entity includes the carrying Costs directly attributable to major development projects of
amount of the goodwill allocated to the entity sold.
property, plant and equipment are capitalised to the asset. Goodwill is allocated to cash-generating units for the purpose Interest costs on borrowings to finance the construction of
of impairment testing. Each of those cash-generating units
property, plant and equipment are capitalised during the period
represents the smallest identifiable group of assets that
of time that is required to complete and prepare the asset for its
generates cash inflows that are largely independent of the cash
intended use. When the construction is completed in parts and
inflows from other assets or groups of assets. The allocation
each part is capable of being used while construction continues
is made to those cash-generating units or groups of cash
on other parts, capitalisation of borrowing costs ceases when
generating units that are expected to benefit from the acquisition
substantially all the activities necessary to prepare that part
in which the goodwill arose.
for its intended use are completed. Other borrowing costs are expensed.
When a deferred tax asset is raised after the initial accounting for a business combination is complete, in respect of deferred tax assets
that did not satisfy the criteria for separate recognition when the
Investment property, principally comprising office buildings, is
business combination was initially accounted for, an adjustment
held for long-term rental yields and is not occupied by the Group.
is made to the amount of goodwill recognised in respect of the
Investment property is treated as a long-term investment and is
acquisition. The goodwill amount is reduced to the amount of
carried at fair value, representing open market value determined
goodwill that would have been recognised if the deferred tax asset
annually by the directors or external valuers, as appropriate.
had been recognised as an identifiable asset from the acquisition
Changes in fair values are recorded in the income statement in
date. This reduction is recognised as an expense.
accordance with IAS 40, Investment Property, and are included in other operating income or costs.
Contingent consideration in a business combination is included in the cost of a business combination if the payment is probable
and reliably measured. Subsequent adjustments to the
Goodwill is carried at cost less accumulated impairment
estimated amount of the contingent consideration are adjusted
Goodwill represents the excess of the cost of an acquisition
When the accounting for a business combination can only be
over the fair value of the Groupâ€™s share of the net identifiable
determined provisionally at the date of reporting, provisional
assets of acquired subsidiaries, businesses, joint ventures
values are used. These provisional values are adjusted once the
or associates at the date of acquisition. Goodwill on the
initial accounting has been completed, which must be within 12
acquisition of subsidiaries and joint ventures is capitalised and
months from the date of acquisition, by retrospectively adjusting
shown separately on the face of the balance sheet; goodwill
the fair values of the net assets acquired and goodwill.
on the acquisition of associates is included in investments in associates. Separately recognised goodwill is tested for
impairment annually, as well as when there are indicators of
Intangible assets are stated at historical cost less accumulated
impairment. Impairment losses on goodwill are not reversed.
amortisation and accumulated impairment losses. Intangible
Refer to the policy on impairment for more details on impairment
assets are not revalued. Amortisation is included in other
Aspen Annual Report 2006