A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. if the recoverable amount of the cash-generating unit is less than its
carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment
loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in
on disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
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
Where, in the opinion of the Directors, the group's expenditure in relation to development of internet activities results in
future economic benefits, these costs are capitalised within software licences and amortised over the useful economic life
of the asset.
Development costs are capitalised only when it is probable that future economic benefit will result from the project and the
following criteria are met:
• the technical feasibility of the product has been ascertained;
• Adequate technical, financial and other resources are available to complete and sell or use the intangible asset;
• the group can demonstrate how the intangible asset will generate future economic benefits and the ability to use or
sell the intangible asset can be demonstrated;
• it is the intention of management to complete the intangible asset and use it or sell it; and
• the development costs can be measured reliably.
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:
software licence agreements 2-15 years
non-contractual customer relationships 4 years
GVC HOLDINGS PLC ANNUAL REPORT 2014 31
notes to the consolidated financial statements