Ardagh Glass Finance plc - Irish Stock Exchange

ACCOUNTING POLICIES (Continued)
Amounts accumulated in equity are recycled in the income statement in the periods when the
hedged item will affect profit or loss (for example, when the forecast sale that is hedged takes place).
The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings
is recognised in the income statement within finance costs.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is
recognised when the forecast transaction is ultimately recognised in the income statement. When a
forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
equity is immediately transferred to the income statement.
INTANGIBLE ASSETS
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s
share of the net identifiable assets of the acquired subsidiary at the date of acquisition.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to those
cash-generating units that are expected to benefit from the business combination in which the goodwill
arose for the purpose of assessing impairment. Goodwill is tested annually for impairment. In respect
of joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment
in the joint venture.
The excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets,
liabilities and contingent liabilities over cost, arising on an acquisition is recognised directly in the
income statement.
(ii) Intangible assets (other than goodwill)
An intangible asset is recognised to the extent that it is probable that the expected future
economic benefits attributable to the asset will flow to the Group and that its cost can be measured
reliably. The asset is deemed to be identifiable when it is separable (i.e. capable of being divided from
the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a
related contract, asset or liability) or when it arises from contractual or other legal rights, regardless of
whether those rights are transferable or separable from the Group or from other rights and obligations.
Intangible assets acquired as part of a business combination are capitalised separately from
goodwill if the intangible asset meets the definition of an asset and the fair value can be reliably
measured on initial recognition.
Subsequent to initial recognition, intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses. The carrying values of intangible assets with finite
useful lives are reviewed for indicators of impairment at each reporting date and are subject to
impairment testing when events or changes in circumstances indicate that the carrying values may not
be recoverable.
The amortisation of intangible assets is calculated to write-off the book value of finite-lived
intangible assets over their useful lives on a straight-line basis on the assumption of zero residual value.
In general, finite lived intangible assets are amortised over periods ranging from three to five years,
depending on the nature of the intangible asset as detailed in the Goodwill & Intangible Assets note.
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