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Annual Report & Accounts 2014 - NOTES
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Certain intangible assets are deemed to have an indefinite useful life as there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. The carrying amounts of such assets at 31 December 2014 were as follows: 2014 2013 €000's €000's Trademarks & Trade Names 15,142 15,142 8.1 amortisation The amortisation for the year is recognised in the following line items in the income statement. 2014 2013 €000's €000's Net operating expenses 3,237 3,236 8.2 impairment tests for cash-Generating Units containing Goodwill and trademarks An Impairment Review of the Group's goodwill was carried out for the year ended 31 December 2014. The goodwill relates to Betboo, CasinoClub and Sportingbet. The carrying values of the assets were compared with the recoverable amounts, the recoverable amount was estimated based upon a value in use calculation, based upon management forecasts for the years ending 31 December 2015 and up to 31 December 2019. The assumptions detailed below have been determined based on past experience in this market which the Group's management believes is the best available input for forecasting this market. Betboo Significant growth is expected in the short-term reducing to 20% annual growth by 2017, a long-term growth rate of 2% was used from 2019 to reflect the likely competitive pressures. A discount rate of 35% was used, based on the internal rate of return of the Betboo acquisition. It was concluded that the carrying value of the goodwill and trademarks was not impaired. CasinoClub A long-term growth rate of 2% was used to reflect the increasing competitive pressures from large online gaming companies. A discount rate of 17.2% was used, based on company specific pre-tax weighted average cost of capital. Having performed appropriate sensitivity analysis on the key assumptions (including reducing the growth rate to nil and increasing the discount rate to 22%), it was concluded that the carrying value of the goodwill and trademarks was not impaired. Sportingbet A long-term growth rate of 3% has been applied to reflect the likely competitive pressures from other large online gaming companies. A discount rate of 20% was used and a sensitivity analysis carried out including increasing the discount to 30%. It was concluded that the carrying value of the goodwill and trademarks was not impaired. The following units have significant carrying amounts of goodwill: 2014 2013 €000's €000's Betboo 8,333 8,333 CasinoClub 40,339 40,339 Sportingbet 84,221 84,221 total Goodwill 132,893 132,893 9. aVailaBle foR sale financial asset 2014 2013 €000's €000's At 1 January - - Additions 3,801 - At 31 December 3,801 - On 14 May 2014, the Group acquired a 15% stake in Betit Holdings Limited ('BHL') from Betit Securities Limited ('BSL'). The consideration was for €3.5 million, which together with professional fees incurred at the time amounted to a total upfront cost of €3.6 million augmented by the net impact of the accounting of the option embedded in the contract - see below for explanation. GVC HOLDINGS PLC ANNUAL REPORT 2014 45 notes to the consolidated financial statements