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
12 Goodwill and other intangibles continued
Intangible assets, other than goodwill, have a finite life and are amortised over their expected useful lives at the rates set out in the accounting policies
in note 1 of this report.
The carrying amounts of acquired intangible assets and goodwill by business are as follows:
Acquired intangible assets
Goodwill
2012
£000
2011
£000
2012
£000
2011
£000
CEIC 2,456 2,537 13,025 13,501
Internet Securities – – 8,406 8,714
MIS – – 2,550 2,644
Petroleum Economist – – 236 236
Gulf Publishing – – 4,723 4,896
HedgeFund Intelligence – – 14,718 14,718
Information Management Network 3,199 3,646 29,243 30,313
MAR 44 55 185 192
BCA 62,780 71,770 143,187 148,426
Metal Bulletin publishing businesses 24,590 27,365 52,710 52,710
FOW – – 196 196
Total Derivatives 2,292 2,729 8,180 8,180
TelCap 2,379 2,549 10,448 10,448
Benchmark Financials 234 286 456 473
Arete 2,801 2,996 4,794 4,794
NDR 33,346 38,916 35,951 36,182
Global Grain Geneva 1,098 – 4,048 –
Other – – 9 9
Total 135,219 152,849 333,065 336,632
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (businesses) that are expected to benefit from
that business combination.
During the year the goodwill in respect of each of the above businesses was tested for impairment in accordance with IAS 36 ‘Impairment of assets’.
The methodology applied to the value in use calculations, reflecting past experience and external sources of information, included:
● forecasts by business based on pre-tax cash flows derived from approved budgets for 2013. Management believe these budgets to be reasonably achievable;
● subsequent cash flows for between one and three additional years increased in line with growth expectations of the applicable business;
● the pre-tax discount rate of 8.5%, reflecting the companies weighted average cost of capital (WACC); and
● long-term nominal growth rate of 3%.
Certain businesses, after the annual impairment review required under IAS 36, had a limited value in use in excess of the carrying value of £1.9 million.
For these businesses management has set out below the change in assumptions required, in isolation, in order for the estimated carrying value to be
equal or less than the value in use. The change in assumptions are summarised as follows:
● Increase in the WACC by 1% point.
● Decrease in the long-term growth rate by 3% points.
The result of the change in assumptions of a 3% decrease in growth rates and a 1% increase in WACC would result in an impairment of £0.3 million.
Management believes that the general market conditions indicate that a decrease in growth rates to 0% or a WACC of 9.5% would be severe.
Management will continue to conduct regular reviews to monitor this matter.
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