are depreciated over the lesser of the period of the lease and

If the Group’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 Group’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

INVESTMENT PROPERTY

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

GOODWILL

and reliably measured. Subsequent adjustments to the

Goodwill is carried at cost less accumulated impairment

estimated amount of the contingent consideration are adjusted

losses.

against goodwill.

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 Group’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

INTANGIBLE ASSETS

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

testing.

operating expenses.

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Aspen Annual Report 2006