H ANNUAL REPORT 2012 o l d i n g G~VC s
24. ACCOUNTING ESTIMATES AND JUDGEMENTS
The Directors discuss the development, selection and disclosure of the Group's critical accounting policies and
estimates and the application of these policies and estimates.
In the application of the accounting policies, which are detailed in this note, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and
future periods if the revision affects both current and future periods. The estimates and assumptions, which have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below.
24.1 Intangible assets
For all acquisitions management has recognised separately identifiable intangible assets on the Balance Sheet.
These intangible assets have been valued based on expected future cash flow projections from existing customers.
The calculations of the value and estimated future economic life of the assets involve, by the nature of the assets,
24.2 Customer liabilities
Customer liabilities represent cash held by the Group on behalf of customers. These are stated net of an allowance
for uncollected dormant balances. Management apply judgement calculating the allowance by reference to player
terms and conditions.
The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below.
Management apply judgement in evaluating the recoverability of receivables. To the extent that the Board believes
receivables not to be recovered they have been provided for in the financial statements.
24.4 Impairment of Goodwill and Trademarks
Determining whether goodwill and trademarks with an indefinite useful life are impaired requires an estimation of
the value in use of the cash-generating units. The value-in-use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and select a suitable discount rate in order to calculate
present value. Note 10.2 provides information on the assumptions used in these financial statements.
The valuation work to assess the impairment of goodwill and intangible assets was conducted by internally by
24.5 Share Options
Accounting for share option charges requires a degree of judgement over such matters as dividend yield, and
expected volatility. Further details on the assumptions made by management are disclosed in note 19.
24.6 Open Bets
The Directors review the scale and magnitude of open bets frequently, and in particular at the balance sheet date.
Assessments are made on whether to make provisions for the outcome of such open bets. Management have
assessed that the value of open bets at year end is not material.
24.7 East Pioneer Corporation B.V.
On 21 November 2011 the Group entered into a B2B arrangement with East Pioneer Corporation B.V. ("EPC") to
provide a suite of back office services to the company following EPC's acquisition of Superbahis, a business operated
by Sportingbet plc ("SBT").
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended 31 December 2012