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McPHERSON’S LIMITED

 ANNUAL REPORT 2015

NOTE 5.   OPERATING PROFIT / (LOSS) (CONTINUED)

(C) SIGNIFICANT ITEMS

The Group’s profit / (loss) after income tax includes the following items that are significant because of their nature or size:

2015

$’000

2014

$’000

(i) Impairment of goodwill within the Australian business segment (Note 16)

(372)

(78,243)

Less: Applicable income tax benefit

-

-

(372)

(78,243)

(ii) Impairment of brandnames within the Australian business segment (Note 16)

(265)

(1,757)

Less: Applicable income tax benefit

80

527

(185)

(1,230)

(iii) Business combination contingent consideration adjustment (Note  31)

2,036

-

Less: Applicable income tax expense

-

-

2,036

-

(iv) Restructure costs

(4,123)

(1,450)

Less: Applicable income tax benefit

1,212

435

(2,911)

(1,015)

(v) Acquisition and transition related costs

(445)

(1,148)

Less: Applicable income tax benefit

133

345

(312)

(803)

(vi) Termination of interest rate swap associated with refinancing

(1,969)

-

Less: Applicable income tax benefit

591

-

(1,378)

-

(vii) Gain on revaluation of put option associated with Housewares joint venture (Note 14)

1,240

-

Net loss on reclassifying New Zealand Housewares business to held for sale (Note 14)

(1,240)

-

Less: Applicable income tax benefit

-

-

-

-

Total significant items

(5,138)

(82,598)

Less: Applicable income tax benefits

2,016

1,307

(3,122)

(81,291)

The significant items set out in the table above are detailed below:

(i) & (ii) Impairment of goodwill and brandnames

The current year impairment writedowns related to goodwill and brandnames are associated with the Group’s decision to divest a minor single 

branded part of the New Zealand business and to discontinue one other minor brand within the Australian Business.  The $372,000 goodwill 

impairment is associated with the Group’s New Zealand cash generating unit, while the $265,000 brandname impairment is associated with the 

Group’s Australian Cash generating unit (excluding Home Appliances). 
During the prior year an impairment charge of $80,000,000 was recognised against the Australian cash generating unit (excluding Home 

Appliances), with $78,243,000 of this charge being recognised against goodwill and the remaining $1,757,000 being recognised against certain 

brandnames. The impairment charge was a direct result of the reduced earnings being generated by the Group’s Australian operations (excluding 

Home Appliances). 
Refer to Note 16 for further information.

NOTES TO AND FORMING PART OF THE  

CONSOLIDATED FINANCIAL STATEMENTS CONTINUED