Financial Report 2009 - Leighton Holdings

Notes continued
for the year ended 30 June 2009
15. GOODWILL
Group
Company
Note
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Carrying value
Balance at beginning of reporting period 120,420 87,680
Acquisitions through business combinations 29 3,200 40,102
Adjustments to the fair value of business combinations
12,716 (1,463)
in previous reporting periods
Disposals - (5,899)
Impairment (12,058) -
Balance at reporting date 124,278 120,420 - -
Reconciliation of carrying value
Cost 137,577 121,661
Impairment (13,299) (1,241)
Balance at reporting date 124,278 120,420 - -
Impairment tests for cash-generating units
containing goodwill
The following cash generating units have significant
carrying amounts of goodwill:
- Leighton Asia Group 14,836 14,836
- John Holland Group 25,144 37,202
- Leighton Contractors Group 70,443 57,527
- Thiess Group 9,055 9,055
- Other 4,800 1,800
124,278 120,420 - -
The recoverable amount of all cash-generating units is based on value in use calculations, using 5-year cash flow projections
based on forecast operating results and the Leighton Holdings Group Business Plan. Pre-tax discount rates within a range of
9-11% (2008: 10-12%) have been used in discounting the projected cash flows. The recoverable amount of each cashgenerating
unit exceeds its carrying amount.
The key assumptions and the approach to determining the recoverable amount of all cash-generating units in the current and
previous year are:
Assumption
How determined
Market / segment growth - Economic forecasts, taking into account the Group’s
participation in each market
Commodity price stability
Inflation / CPI rates and foreign currency rates
- Analysis of price forecasts, adjusted for actual experience
- World economic forecasts
Leighton Holdings Limited FINANCIAL REPORT 2009 21