070917_KPGHL_Annual Report 2017_final_PREVIEW

Notes to the Financial Statements | For the Year Ended 30 June 2017
12 Intangible Assets continued
Impairment testing
For the purpose of impairment testing, goodwill and other indefinite life intangibles are allocated to cash-generating
units ("CGU") which are based on the Group's operating divisions. The aggregate carrying amount of goodwill allocated
to each CGU is:
2017 2016
$ $
Kelly Partners (Sydney) Pty Ltd 3,538,147 -
Kelly Partners South West Sydney Partnership 5,001,779 5,001,779
Kelly Partners Wollongong Partnership 3,391,692 3,391,692
Other partnerships 5,916,020 4,132,313
Total 17,847,638 12,525,784
The carrying value of indefinite life intangibles is $3,300,000 (2016: $3,300,000).
The recoverable amount of each cash-generating unit above is determined based on value in use calculations. These
calculations use cashflow projections over a five year period, based on financial budgets approved by management.
These budgets use historical growth rates to project revenue. Costs are calculated taking into account historical gross
margins as well as estimated inflation rates over the period which are consistent with inflation rates applicable to
the locations in which the CGU operates. With regard to the assessment of the CGU's, management believes that
no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to
materially exceed its recoverable amount.
The following assumptions were used in the calculations:
2017
Growth Rate 2.50
Discount rate 16.50
%
Notes to the Financial Statements
13 Tax
Deferred Tax Assets
Opening
Balance
(Charged)/
credited to
income
Credited to
equity
Business
combination
Other
movements
Closing
Balance
$ $ $ $ $ $
Deferred tax assets
Accruals 186,406 (9,205) - - (434) 176,767
Income assessable on receipt (35,680) 12,212 - - (8,695) (32,163)
Differences between accounting
and tax depreciation
(12,546) (8,512) - - 788 (20,270)
Balance at 30 June 2016 138,180 (5,505) - - (8,341) 124,334
Accruals 176,767 84,633 - 110,538 - 371,938
Income assessable on receipt (32,163) (368,597) - - - (400,760)
Differences between accounting
and tax depreciation
(20,270) 148 - - - (20,122)
Customer relationship intangibles - 83,919 - (1,014,604) - (930,685)
Expense deductible over five years - 397,061 276,154 - - 673,215
Write-off of loan - 53,828 - - (53,828) -
Balance at 30 June 2017 124,334 250,992 276,154 (904,066) (53,828) (306,414)
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