1.6.2 Other Intangible Assets
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see 1.6.4) and
impairment losses (see accounting policy 1.7).
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 identifiable asset category is detailed below:
Asset category Valuation methodology
Consulting and magazine Income (cost saving)
Software licence Income (incremental value plus loss of profits)
Trademarks Relief from royalty
Trade name Relief from royalty
Non Contractual customer relationships Excess earnings
Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense is incurred.
1.6.3 Subsequent Expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. This includes legal and similar expenditure incurred in registering brands
and trade names, which is capitalised, all other expenditure is expensed as incurred.
Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets
unless such lives are indefinite. Goodwill and trademarks with an indefinite useful life are systematically tested for impairment
at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated
useful lives are as follows:
Consulting agreements 3-5 years
Capitalised development costs 2-4 years
Software licence agreements 2-15 years
Non-contractual customer relationships 4 years
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an
indicator of impairment exists, the Group makes an estimate of the recoverable amount. Where the carrying amount of an
asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Recoverable amount is the higher
of fair value less costs to sell and value in use and is determined for an individual asset. If the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets, the recoverable amount of the cash
generating unit to which the asset belongs is determined. Discount rates reflecting the asset specific risks and the time
value of money are used for the value in use calculation.
For goodwill and trademarks that have an indefinite useful life, the recoverable amount is estimated at each balance sheet
1.8 Dividends Paid to Holders of Share Capital
Dividend distributions payable to equity shareholders are recognised through equity reserves on the date the dividend is
1.9 Employee Benefits
1.9.1 Pension Costs
In some jurisdictions in which the Group has employees, there are government or private schemes into which the employing
company or branch must make payments on a defined contribution basis, the contributions are shown in the profit or loss
account in the year.
1.9.2 Share Options
The Group has share option schemes which allow Group employees and contractors to acquire shares of the Company.
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period during which the employees become unconditionally entitled to
GVC HOLDINGS PLC ANNUAL REPORT 2013 33
NOTES TO THE FINANCIAL STATEMENTS