McPHERSON’S LIMITED
ANNUAL REPORT 2015
67
Reconciliations
Reconciliations of the carrying amounts of each class of intangible assets at the beginning and end of the financial year are set out below:
NOTE
GOODWILL
$’000
BRANDNAMES
$’000
OTHER INTANGIBLES
$’000
TOTAL
$’000
Carrying amount at 30 June 2013
124,641
42,655
808
168,104
Additions
-
-
1,128
1,128
Acquisition of businesses/brands
31
448
23,177
-
23,625
Transfers/adjustments
(9,377)
(14,816)
-
(24,193)
Disposals
(460)
-
-
(460)
Impairment charge
(78,243)
(1,757)
-
(80,000)
Amortisation charge
-
-
(393)
(393)
Foreign currency exchange differences
455
-
-
455
Carrying amount at 30 June 2014
37,464
49,259
1,543
88,266
Additions
-
42
1,426
1,468
Acquisition of brands
31
-
7,257
-
7,257
Transfers/adjustments
14, 31
(2,270)
(4,140)
-
(6,410)
Disposals
-
-
(65)
(65)
Impairment charge
(372)
(265)
-
(637)
Amortisation charge
-
-
(403)
(403)
Foreign currency exchange differences
(58)
-
-
(58)
Carrying amount at 30 June 2015
34,764
52,153
2,501
89,418
Acquired brandnames are not amortised under AASB 138
Intangible Assets, as the Directors consider these to have an indefinite life. The
brandnames are subject to an annual impairment test.
Due to the upcoming sale of the Group’s New Zealand Housewares business an amount of $2,270,000 has been transferred from goodwill to assets
held for sale. Refer to Note 14(B) for further information.
The Group is required to assess its provision for contingent consideration payable at each balance date. Based on this review an amount of
$4,140,000 has been adjusted against the associated brandnames. Refer to Note 31 for further information.
Impairment Testing
Goodwill
Goodwill is allocated to the following cash generating units:
2015
$’000
2014
$’000
Australia (excluding Home Appliances)
13,042
13,042
Home Appliances
19,393
19,393
New Zealand
2,329
5,029
34,764
37,464
The recoverable amount of a cash generating unit is determined based on a value-in-use calculation. These calculations use cash flow projections
based on financial budgets/forecasts covering a one year period. Cash flows beyond the projected period are extrapolated using estimated growth
rates. In performing the value-in-use calculations for each cash generating unit, the Group has applied a post-tax discount rate to discount the
forecast future attributable post-tax cash flows.
The assumptions used in the value-in-use calculations, for all cash generating units, are set out below:
30 JUNE 2015
30 JUNE 2014
ESTIMATED GROWTH
RATES YEAR 2
ONWARDS
POST–TAX
DISCOUNT
RATE
PRE-TAX
DISCOUNT
RATE
ESTIMATED GROWTH
RATES YEAR 2
ONWARDS
POST–TAX
DISCOUNT
RATE
PRE-TAX
DISCOUNT
RATE
Australia (ex Home Appliances)
2.0%
9.8%
13.1%
2.0%
11.5%
15.1%
Home Appliances
3.0%
10.0%
13.1%
3.0%
11.5%
15.1%
New Zealand
2.0%
10.3%
14.0%
2.0%
11.5%
14.7%