BT 2015 Annual Report Download - page 169

167
Overview
The Strategic Report
Purpose and strategy Delivering our strategy Group performance Governance Financial statements
Additional information
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Goodwill impairment review
he roup perfors an annual oodwill ipairent review based on its cash eneratin units Us.
he Us that have associated oodwill are  lobal ervices  usiness and  onsuer. hese are the sallest identifiable roups of assets that
enerate cash inows that are larel independent of the cash inows fro other roups of assets and to which oodwill is allocated. oodwill is
allocated to the group’s CGUs as follows:
BT Global
Services
restated
£m
BT Business
a restated
£m
a BT Consumer
£m
Total
£m
At 1 April 2013 24 221 65 
cuisitions note 1 ––15 15
Disposals and adjustments 1 ––1
chane dierences   –
$W0DUFK 7 214 80 
chane dierences 59 6 – 65
$W0DUFK  220 80 
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he discount rate used in perforin the value in use calculation in 011 was 9.3 011 9. for all Us. he perpetuit rowth rate for
lobal ervices was . 011 . and .0 011 .0 for  usiness and  onsuer.
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he value in use of each U is deterined usin cash ow proections derived fro financial plans approved b the oard coverin a three-ear
period. he reect anaeents epectations of revenue  rowth capital ependiture worin capital and operatin cash ows based on
past eperience and future epectations of business perforance. ash ows are also adusted downwards to reect the dierent ris attributes of
each U. ash ows beond the three-year period have been extrapolated using perpetuity growth rates.
Discount rate
he pre-ta discount rates applied to the cash ow forecasts are derived fro the roups post-ta weihted averae cost of capital. he assuptions
used in the calculation of the group’s weighted average cost of capital are benchmarked to externally available data.
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he perpetuit rowth rates are deterined based on the lon-ter historical rowth rates of the reions in which the U operates and the reect
an assessment of the long-term growth prospects of that sector. The growth rates have been benchmarked against external data for the relevant
markets. None of the growth rates applied exceed the long-term historical average growth rates for those markets or sectors.
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here is sinificant headroo in all Us. or  lobal ervices the value in use eceeds the carrin value of the U b approiatel .
hefollowin chanes in cobination in assuptions would cause the recoverable aount to fall below the carrin value
– reduction in the perpetuit rowth rate fro the . assuption applied to a revised assuption of 0 no rowth
– an increase in the discount rate from the 9.3% assumption applied to a revised assumption of 15% or more
– shortfalls in tradin perforance aainst forecast resultin in operatin cash ows decreasing by £180m or more in perpetuity.
For BT Business and BT Consumer no reasonably possible changes in the key assumptions would cause the carrying amount of the CGUs to exceed
the recoverable amount.