Jupiter Annual Report 2010 - Jupiter Asset Management

Financial statements – continuation | Notes to the financial statements
14. Goodwill
Group
On 19 June 2007, the Group acquired the entire share capital of Comasman Limited (formerly Commerz Asset Management (UK) plc) which gave
rise to a goodwill asset being recognised.
Goodwill arising on acquisition of Comasman Limited
2010
£m
2009
£m
At 1 January 341.2 341.2
Total goodwill at 31 December 341.2 341.2
No additional goodwill was acquired in the period (2009: £nil).
■■Impairment review for goodwill
The Group has determined that it has a single CGU for the purpose of assessing the carrying value of goodwill and intangible assets. The
Directors have reviewed the total goodwill amount at 31 December 2010 for indicators of impairment and conclude that there are no indicators
of impairment.
The recoverable amount of goodwill at year end has been determined from a value in use calculation which uses a cash flow projection based on
the Group’s approved three year forecast and a terminal value. The key assumptions include cost inflation of 2 per cent. per annum throughout
and a discount rate of 9.32 per cent. per annum. The discount rate has been calculated using a CAPM and a WACC model in line with industry
practice. The cash flow projection was also compared against external analyst models to ensure that assumptions were reasonable.
The impairment review included a sensitivity analysis which concluded that the discount rate would need to reach 35.5 per cent. before the final
value in use fell to equal the carrying value of goodwill.
15. Intangible assets
Group
Net carrying values of intangible assets
2010
£m
2009
£m
Computer software 2.6 3.2
Investment management contracts and trade name arising on acquisition
of Comasman Limited
139.8 178.5
Total intangible assets at 31 December 142.4 181.7
The intangible asset which relates to investment management contracts is amortised over seven years on a straight line basis from the date of
acquisition of Comasman Limited on 19 June 2007. The Directors consider this to be an appropriate period. The intangible asset relating to the
valuation of the trade name is being amortised on a straight line basis over ten years.
The amortisation charge for the year was £39.8m for investment management contracts, brand name and software in the period (2009: £39.8m).
No additional investment management contracts were acquired in the year (2009: £nil).
■■Test for impairment
The Directors have reviewed the acquired intangible assets as at 31 December 2010 for indicators of impairment as per IAS 36 and have
concluded that there are no indicators of impairment.
Annual Report & Accounts 2010 76 Jupiter Fund Management plc