annual report 2011

IOOF | annual report 2011
Notes to the financial statements (cont’d)
For the year ended 30 June 2011
19 Other intangible assets
Consolidated Parent
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Cost 302,684 307,195 - -
Accumulated amortisation and impairment losses (43,687) (30,501) - -
258,997 276,694 - -
Consolidated
Adviser Computer Customer Brand names Contract
Total
relationships software relationships
agreements
$’000 $’000 $’000 $’000 $’000 $’000
Carrying value
Balance at 1 July 2009 1,560 6,269 250,934 22,653 9,029 290,445
Additions 2,090 250 1,814 - - 4,154
Amortisation for the year (961) (1,503) (13,669) (801) (971) (17,905)
Balance at 30 June 2010 2,689 5,016 239,079 21,852 8,058 276,694
Balance at 1 July 2010 2,689 5,016 239,079 21,852 8,058 276,694
Additions - 307 - - - 307
Disposals - - (24) - - (24)
Amortisation for the year (916) (1,408) (13,884) (801) (971) (17,980)
Balance at 30 June 2011 1,773 3,915 225,171 21,051 7,087 258,997
Impairment testing for cash-generating units
containing indefinite life intangible assets
For the purposes of impairment testing, indefinite life
intangibles are allocated to the Group’s operating divisions,
or CGUs, which represent the lowest level within the Group
at which the goodwill is monitored for internal management
purposes.
Each CGU is not higher than the Group’s operating segments
as reported in Note 7 operating segments.
The aggregate carrying amounts of indefinite-life intangible
assets allocated to each CGU are as follows:
Consolidated
Indefinite life intangibles
2011 2010
$’000 $’000
The indefinite life intangible asset relates to the Ord Minnett
brand name. In designating the Ord Minnett brand name as
indefinite life, consideration was given to the length of time
the brand name has been in existence and it was determined
that there is no foreseeable limit to the period over which the
brand name is expected to generate net cash inflows for the
Group.
The recoverable amount for the Ord Minnett group brand
name has been determined based on a royalty savings
method of calculating value in use. The calculation
incorporates estimated costs of brand maintenance. The
discount rate of 17% used reflects the Group’s pre-tax nominal
weighted average cost of capital. Management’s assessment of
indefinite life intangible value-in-use exceeds the value of the
intangible asset allocated to the CGU, therefore any reasonably
possible changes to assumptions used in management’s
assessment will not result in impairment.
Ord Minnett group 6,773 6,773
page 86