BROADENING OUR HORIZONS - Arrium

Notes to the Financial StatementsDescription of the Group’s intangible assetsGoodwillAfter initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated impairment losses.Goodwill is not amortised but is subject to impairment testing on an annual basis and whenever there is an indication of impairment.System development costsSystem development costs are carried at cost less accumulated amortisation and impairment losses. These have been assessed ashaving a finite life and amortised on a straight-line basis. If an impairment indication arises, the recoverable amount is estimated and animpairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount.Customer relationships, supplier contracts, know-how, patents and finite life brand namesThese intangibles have been acquired through business combinations and are carried at cost less accumulated amortisation andimpairment losses. These intangible assets have been determined to have finite lives. If an impairment indication arises, the recoverableamount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount.91Indefinite life brand namesIncluded in Brand Names are indefinite life brand names with a carrying amount of $115.9m as at 30 June 2011 (2010: $72.3m). Thesebrand names are core to the continuing operations of the Group and accordingly have been assessed as having an indefinite useful lifeas there is no foreseeable limit to the period over which the assets are expected to generate net cash inflows for the Group. Indefinite lifebrand names are carried at cost less accumulated impairment losses. These assets are subject to impairment testing on an annual basisand whenever there is an indication of impairment.Impairment testing of goodwill and intangibles with indefinite useful lives(a) Carrying amount of goodwill and intangibles with indefinite useful lives allocated to each of the cash generating units (CGUs)For the purpose of impairment testing, goodwill and/or indefinite life intangibles have been allocated to the Group’s CGUs/groups of CGUswhich represent the lowest level within the Group at which they are monitored for internal management purposes.The aggregate carrying value of goodwill and indefinite life brand names according to business segment and country of operation areas follows:CONSOLIDATEDIndefinite life2011Goodwill$mintangibles$mTotal$mRecycling 325.2 — 325.2Manufacturing 621.8 26.4 648.2Mining Consumables 1,130.1 43.6 1,173.7Australian Distribution 279.5 45.9 325.4New Zealand Distribution 12.2 — 12.22,368.8 115.9 2,484.7CONSOLIDATED2010Goodwill$mIndefinite lifeintangibles$mTotal$mRecycling 355.9 — 355.9Manufacturing 621.8 26.4 648.2Mining Consumables 703.9 — 703.9Australian Distribution 279.4 45.9 325.3New Zealand Distribution 12.9 — 12.91,973.9 72.3 2,046.2