13. Intangible assets The movements during the prior year and current year in respect of intangible assets, which comprise computer software, licences and brands (all acquired), were as follows:
Cost Balance at 1 January 2009 Additions Additions – business combinations (Note 16) Disposals Foreign currency retranslation adjustment Balance at 31 December 2009 Additions Disposals Transfers (Note 12) Foreign currency retranslation adjustment Balance at 31 December 2010
Amortisation and impairment Balance at 1 January 2009 Amortisation charges Impairment charges Disposals Foreign currency retranslation adjustment Balance at 31 December 2009 Amortisation charges Impairment charges / (reversals) Disposals Foreign currency retranslation adjustment Balance at 31 December 2010 Net book value At 31 December 2010 At 31 December 2009
Computer software Restated €’000
Licences €’000
Brands €’000
Total Restated €’000
18,005 2,725 1,965 (20) 99 22,774 6,594 (24) 1,463 850 31,657
26,596 596 - - (2,280) 24,912 119 (12) (102) 648 25,565
- - 13,743 - 999 14,742 - - - 3,224 17,966
44,601 3,321 15,708 (20) (1,182) 62,428 6,713 (36) 1,361 4,722 75,188
11,322 2,669 803 - 21 14,815 5,796 (10) (12) 258 20,847
1,667 496 - - - 2,163 652 18 (2) - 2,831
- - - - - - - - - - -
12,989 3,165 803 21 16,978 6,448 8 (14) 258 23,678
10,810 7,959
22,734 22,749
17,966 14,742
51,510 45,450
The value of betting shop licences of €20,610,000 (2009: €19,975,000) acquired as a result of the purchase of D McGranaghan Limited in 2008 are not being amortised as the directors consider these licences to have an indefinite life because: - existing law in Northern Ireland restricts entry of new competitors; - there exists a proven and future expected demand for bookmaking services and products; and - Paddy Power has a track record of renewing its betting permits and licences at minimal cost. The value of brands intangible assets recognised on application of fair value accounting to the purchase of Sportsbet and IAS in 2009 (amounting to €17,966,000 at 31 December 2010 (2009: €14,742,000) – see Note 16) are not being amortised as the directors consider that the relevant brands have indefinite lives because: - the directors intend to utilise the brands in the businesses for the foreseeable future; and - substantial sums are invested annually in the form of marketing expenditure expensed through profit or loss to maintain and to enhance the value of these brands. The Group reviews the carrying value of licences and brands for impairment annually (or more frequently if there are indications that the value of the licences and brands may be impaired) by comparing the carrying values of these assets with their recoverable amounts (being the higher of value in use and fair value less costs to sell).
Paddy Power plc Annual Report 2010
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