Aviva 2013 Annual Report Download - page 161

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Aviva plc
Annual report and accounts 2013
159
Notes to the consolidated financial statements continued
18 – Acquired value of in-force business (AVIF) and intangible assets
This note shows the movements in cost and amortisation of the in-force business and intangible assets acquired when the Group
has purchased subsidiaries.
AVIF on
insurance
contracts1,3
£m
AVIF on
investment
contracts2,3
£m
Other
intangible
assets with
finite useful
lives3
£m
Intangible
assets with
indefinite
useful
lives (a)
£m
Total
£m
Gross amount
At 1 January 2012 2,464 299 1,765 117 4,645
Additions — — 143 — 143
Acquisition of subsidiaries — — 2 — 2
Disposals (160) (5) (134) — (299)
Movement in shadow adjustment 45 — — — 45
Transfers from property and equipment — — 3 — 3
Foreign exchange rate movements (88) (6) (42) (3) (139)
At 31 December 2012 2,261 288 1,737 114 4,400
Additions — — 110 — 110
Disposals3 (1,850) (158) (477) — (2,485)
Movement in shadow adjustment 133 — — — 133
Foreign exchange rate movements 18 10 8 4 40
At 31 December 2013 562 140 1,378 118 2,198
Accumulated amortisation
At 1 January 2012 (1,535) (155) (650) — (2,340)
Amortisation for the year (226) (20) (107) — (353)
Disposals 154 5 59 — 218
Foreign exchange rate movements 60 5 16 — 81
At 31 December 2012 (1,547) (165) (682) — (2,394)
Amortisation for the year (133) (8) (73) — (214)
Disposals3 1,308 102 314 — 1,724
Foreign exchange rate movements (11) (7) 8 — (10)
At 31 December 2013 (383) (78) (433) — (894)
Accumulated Impairment
At 1 January 2012 (114) — (105) (65) (284)
Impairment losses charged to expenses (34) (39) (152) — (225)
Disposals 3 — 70 — 73
Foreign exchange rate movements 1 — 2 2 5
At 31 December 2012 (144) (39) (185) (63) (431)
Impairment losses charged to expenses — — (24) — (24)
Disposals3 61 15 151 — 227
Foreign exchange rate movements (2) — (3) (3) (8)
At 31 December 2013 (85) (24) (61) (66) (236)
Carrying amount
At 1 January 2012 815 144 1,010 52 2,021
At 31 December 2012 570 84 870 51 1,575
At 31 December 2013 94 38 884 52 1,068
Less: Assets classified as held for sale — — — — —
94 38 884 52 1,068
1 On insurance and participating investment contracts.
2 On non-participating investment contracts.
3 Disposals include the disposal of the US business in 2013.
(a) Intangible assets with indefinite useful lives comprise the value of the Union Financière de France Banque distribution channel,
where the existing lives of the assets and their competitive position in, and the stability of, their respective markets support this
classification. Impairment testing of these intangible assets is covered in note 17(b).
(b) Other intangible assets with finite useful lives consist primarily of the value of bancassurance and other distribution agreements.
Acquisitions of intangible assets with finite lives relate to Canadian broker businesses.
Disposals comprise the AVIF and intangible assets with finite useful lives of the US Life business and also include the
derecognition of exhausted assets which are fully amortised or impaired with nil carrying value.
Impairment losses on intangible assets with finite lives of £24 million arise from impairments of capitalised software in the
US long-term operations, Aviva Investors and Canada general insurance operations of £10 million, £11 million and £3 million
respectively. Impairment tests were conducted as described in note 17(b).
AVIF on insurance and investment contracts is generally recoverable in more than one year. Of the total AVIF of £132
million (£94 million on insurance contracts, £38 million on investment contracts), £93 million (2012: £131 million) is expected
to be recovered more than one year after the statement of financial position date.