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Annual Report & Accounts 2007 - Notes
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(d) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to euro at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to euro at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the consolidated income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. (ii) Financial statements of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to euro at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to euro at rates approximating to the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity. (e) Property, plant and equipment (i) Owned assets Property, plant and equipment are stated at cost, less accumulated depreciation (see below) and impairment losses (see accounting policy g). Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. (ii) Depreciation Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows: . buildings 40 years . plant and equipment 3-12 years . ¢xtures and ¢ttings 5-10 years The residual value, if not insigni¢cant, is reassessed annually. (f) Intangible assets (i) Goodwill Acquired goodwill represents the excess of the cost of a business combination over the Group’s interest in the fair value of the identi¢able assets, liabilities and contingent liabilities of the acquiree at the date of acquisition. Goodwill is tested at least annually for impairment and carried at cost less accumulated impairment losses. At the date of acquisition, goodwill is allocated to cash generating units for the purpose of impairment testing. Negative goodwill arising on an acquisition is recognised directly in pro¢t or loss. (ii) Other intangible assets Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy g). The cost of intangible assets acquired in a business combination is the fair value at acquisition date. The valuation methodology used for each type of identi¢able asset category is detailed below: . Magazine-related Cost . Consulting Income (cost saving) . Software licence Income (incremental value plus loss of pro¢ts) . Trademarks Relief from royalty . Goodwill Residual balance Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred. (iii) Subsequent expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene¢ts embodied in the speci¢c asset to which it relates. All other expenditure is expensed as incurred. 12