Report & Accounts - JLT

Financial StatementsNotes to the Financial Statementsfor the year ended 31st December 200512. Goodwill cont.Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below:Key assumptions used for value-in-use calculations:Risk & InsuranceEmployee BenefitsUK &UK &Australasia Asia Europe Americas Europe USAt 31st December 2005Growth rate (1) 5.90 6.27 4.10 6.22 4.10 6.10Discount rate (2) 15.71 12.39 11.20 12.02 17.01 14.4074At 31st December 2004Growth rate (1) 5.70 6.37 4.30 6.01 4.30 6.10Discount rate (2) 16.37 12.80 11.37 16.39 17.56 13.43(1) Average growth rate used to extrapolate cash flows beyond five years.(2) Pre-tax discount rate applied to the cash flow projections.The key assumptions used in value in use calculations were:The budgeted trading profit growth: management determines budgeted trading profit based on past experience and its expectation for themarket development.The budgeted IBA interest income growth: this is based on past experience and long-term interest rates projections.The discount rates used are pre-tax and reflect specific risks relating to the relevant segment and country of operation. The weightedaverage growth rates used are consistent with long-term economic forecasts in the countries of operation.Jardine Lloyd Thompson Group plc Annual Report & Accounts 2005Asset impairment:A total impairment loss of £761,000 has been recognised during the year in respect of JLT Services Inc. which is included in the EmployeeBenefits business segment. During the year a significant business portfolio was sold and a further part of the business is being restructuredto be managed and reported internally via a different CGU with effect from January 2006. The recoverable amount of the CGU containingthe related goodwill was determined based on value in use calculations using a discount rate of 14.4% (2004: 14.7%). During the previousyear an impairment loss of US$2,179,000 (£1,192,000 average exchange rates) was recognised in respect of JLT Re Solutions due to thesignificant loss of business.The allocation of the total impairment loss can be summarised as follows:2005 2004£'000 £'000Goodwill 38 1,192Intangible assets 56 -Property, plant and equipment 421 -Trade and other receivables 246 -Total impairment 761 1,192