Annual Report & Accounts 2012 - Euromoney Institutional Investor ...

Euromoney Institutional Investor PLC Annual Report and Accounts 2012
www.euromoneyplc.com
Notes to the Consolidated
Financial Statements continued
1 Accounting policies continued
Foreign currencies
Functional and presentation currency
The functional and presentation currency of Euromoney Institutional
Investor PLC and its UK subsidiaries other than Fantfoot Limited is sterling.
The functional currency of subsidiaries and associates is the currency of
the primary economic environment in which they operate.
Transactions and balances
Transactions in foreign currencies are recorded at the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated into sterling at the rates
ruling at the balance sheet date.
Gains and losses arising on foreign currency borrowings and derivative
instruments, to the extent that they are used to provide a hedge against
the group’s equity investments in overseas undertakings, are taken to
equity together with the exchange difference arising on the net investment
in those undertakings. All other exchange differences are taken to the
Income Statement.
Group companies
The Income Statements of overseas operations are translated into sterling
at the weighted average exchange rates for the year and their balance
sheets are translated into sterling at the exchange rates ruling at the
balance sheet date. All exchange differences arising on consolidation are
taken to equity. In the event of the disposal of an operation, the related
cumulative translation differences are recognised in the Income Statement
in the period of disposal.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated
depreciation and any recognised impairment loss.
Depreciation of property, plant and equipment is provided on a straightline
basis over their expected useful lives at the following rates per year:
Freehold land
do not depreciate
Freehold buildings 2%
Long-term leasehold premises over term of lease
Short-term leasehold premises over term of lease
Office equipment 11% – 33%
Motor vehicles 20%
Intangible assets
Goodwill
Goodwill represents the excess of the fair value of purchase consideration
over the net fair value of identifiable assets and liabilities acquired.
Goodwill is recognised as an asset at cost and subsequently measured at
cost less accumulated impairment. For the purposes of impairment testing,
goodwill is allocated to those cash generating units that have benefited
from the acquisition. Assets are grouped at the lowest level for which
there are separately identifiable cash flows. The carrying value of goodwill
is reviewed for impairment at least annually or where there is an indication
that goodwill may be impaired. If the recoverable amount of the cash
generating unit is less than its carrying amount, then the impairment loss
is allocated first to reduce the carrying amount of the goodwill allocated
to the unit and then to the other assets of the unit on a pro-rata basis. Any
impairment is recognised immediately in the Income Statement and may
not subsequently be reversed. On disposal of a subsidiary undertaking, the
attributable amount of goodwill is included in the determination of the
profit and loss on disposal.
Goodwill arising on foreign subsidiary investments held in the consolidated
balance sheet are retranslated into sterling at the applicable period end
exchange rates. Any exchange differences arising are taken directly to
equity as part of the retranslation of the net assets of the subsidiary.
Goodwill arising on acquisitions before the date of transition to IFRS has
been retained at the previous UK GAAP amounts having been tested for
impairment at that date. Goodwill written off to reserves under UK GAAP
before October 1 1998 has not been reinstated and is not included in
determining any subsequent profit or loss on disposal.
Internally-generated intangible assets
An internally-generated intangible asset arising from the group’s software
and systems development is recognised only if all of the following
conditions are met:
● An asset is created that can be identified (such as software or a
website);
● It is probable that the asset created will generate future economic
benefits; and
● The development cost of the asset can be measured reliably.
Internally-generated intangible assets are stated at cost and amortised on
a straight-line basis over the useful lives. Where no internally-generated
intangible asset can be recognised, development expenditure is recognised
as an expense in the period in which it is incurred.
64