Financial Report 2008 - Leighton Holdings

Notes to the Financial Statements continuedfor the year ended 30 June 200814. GOODWILLConsolidatedCompanyNote2008$’0002007$’0002008$’0002007$’000Carrying valueBalance at beginning of reporting period 87,680 54,898Acquisitions through business combinations 28 40,102 32,782Adjustments to the fair value of business combinations in(1,463) -previous reporting periodsDisposals (5,899) -Balance at reporting date 120,420 87,680 - -Reconciliation of carrying valueCost 121,661 88,921Impairment (1,241) (1,241)Balance at reporting date 120,420 87,680 - -Impairment tests for cash-generating units containinggoodwillThe following cash generating units have significant carryingamounts of goodwill:- Leighton Asia Group 14,836 14,836- John Holland Group 37,202 40,947- Leighton Contractors Group 59,327 31,897- Thiess Group 9,055 -120,420 87,680 - -The recoverable amount of all cash-generating units is based on value in use calculations, using 5-year cash flow projectionsbased on actual operating results and the Leighton Holdings Group Business Plan. A pre-tax discount rate of 11.3% (2007:11.3%) has been used in discounting the projected cash flows. The recoverable amount of each cash-generating unit exceedsits carrying amount.The key assumptions and the approach to determining the recoverable amount of all cash-generating units in the current andprevious year are:AssumptionMarket/segment growthCommodity price stabilityInflation/CPI rates and foreign currency ratesHow determinedEconomic forecasts, taking into account the Group’s participation in each marketAnalysis of price forecasts, adjusted for actual experienceWorld economic forecastsLeighton Holdings Limited Financial Report 2008 NOTES TO THE FINANCIAL STATEMENTS 19