Annual Report 2010 - SBM Offshore

Financial Review / Financial Statements 2010
11. Intangible assets
Development
Goodwill Patents
2010
Total
in thousands of US$
costs
Cost 31,563 25,048 12,633 69,244
Accumulated amortisation (664) - (7,159) (7,823)
Book value at 1 January 30,899 25,048 5,474 61,421
Additions 9,565 - - 9,565
Amortisation (1,761) - (842) (2,603)
FX on movements (459) - - (459)
Total movements 7,345 - (842) 6,503
Cost 40,658 25,048 12,633 78,339
Accumulated amortisation (2,414) - (8,001) (10,415)
Book value at 31 December 38,244 25,048 4,632 67,924
Development
Goodwill Patents
2009
Total
in thousands of US$
costs
Cost 15,418 25,048 12,633 53,099
Accumulated amortisation - - (6,317) (6,317)
Book value at 1 January 15,418 25,048 6,316 46,782
Additions 15,945 - - 15,945
Amortisation (653) - (842) (1,495)
FX on movements 189 - 189
Total movements 15,481 - (842) 14,639
Cost 31,563 25,048 12,633 69,244
Accumulated amortisation (664) - (7,159) (7,823)
Book value at 31 December 30,899 25,048 5,474 61,421
Amortisation of development costs is included in ‘Cost
of sales’ in the income statement. All development
costs arose from internal development and relate principally
to LNG products.
Goodwill relates to the acquisition of the Houston
based subsidiaries. The recoverable amount is determined
based on value-in-use calculations. These
148 SBM Offshore – Annual Report 2010
calculations use pre-tax cash flow projections based
on financial budgets approved by management covering
a five-year period. Cash flows beyond the five-year
period are extrapolated using estimated growth rates
(2%). Management determined budgeted gross margin
based on past performance and its expectations of
market development. The discount rates used are pretax
and reflect specific risks (8%).