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Notes to the Accounts STATEMENT OF FINANCIAL POSITION
13. Intangible assets
Group Company
Goodwill
HK$M
Computer
systems
HK$M
Total
HK$M
Computer
systems
HK$M
Cost
At 1st January 2011 7,666 981 8,647 952
Additions – 638 638 610
At 31st December 2011 7,666 1,619 9,285 1,562
At 1st January 2010 7,666 792 8,458 764
Additions – 189 189 188
At 31st December 2010 7,666 981 8,647 952
Accumulated amortisation
At 1st January 2011 – 643 643 616
Charge for the year – 41 41 36
At 31st December 2011 – 684 684 652
At 1st January 2010 – 608 608 582
Charge for the year – 35 35 34
At 31st December 2010 – 643 643 616
Net book value
At 31st December 2011 7,666 935 8,601 910
At 31st December 2010 7,666 338 8,004 336
The carrying amount of goodwill allocated to the airline operation is HK$7,627 million (2010: HK$7,627 million). In
accordance with HKAS 36 “Impairment of Assets” the Group completed its annual impairment test for goodwill
allocated to the Group’s various cash generating units (“CGUs”) by comparing their total recoverable amounts to
their total carrying amounts as at the reporting date. The recoverable amount of a CGU is determined based on
value-in-use calculations. These calculations use cash flow projections based on five-year financial budgets, with
reference to past performance and expectations for market development, approved by management. Cash flows
beyond the five-year period are extrapolated with an estimated general annual growth rate which does not exceed
the long-term average growth rate for the business in which the CGU operates. The discount rates used of
approximately 8.5% (2010: 9.0%) are pre-tax and reflect specific risk related to the relevant segments. Management
believes that any reasonably foreseeable change in any of the above key assumptions would not cause the carrying
amount of goodwill to exceed the recoverable amount.
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