EasyJet 2014 Annual Report Download - page 116
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114 easyJet plc Annual report and accounts 2014
Notes to the accounts continued
8 Goodwill and other intangible assets continued
Other intangible assets
Goodwill
£ million
Landing rights
£ million
Contractual
rights
£ million
Computer
software
£ million
Total
£ million
Cost
At 1 October 2012 365 74 1 35 110
Additions – 7 – – 7
Transfer from property, plant and equipment – – – 14 14
Disposals – – – (15) (15)
At 30 September 2013 365 81 1 34 116
Amortisation
At 1 October 2012 – – – 19 19
Charge for the year – – – 10 10
Disposals – – – (15) (15)
At 30 September 2013 – – – 14 14
Net book value
At 30 September 2013 365 81 1 20 102
At 1 October 2012 365 74 1 16 91
easyJet has one cash-generating unit, being its route network. The recoverable amount of goodwill and other assets with
indefinite expected useful lives has been determined based on value in use calculations of the route network.
Pre-tax cash flow projections have been derived from the strategic plan approved by the Board for the period up to 2019,
using the following key assumptions:
Pre-tax discount rate (derived from weighted average cost of capital) 13.6-14.2%
Fuel price (US dollars per metric tonne) 1,050
Exchange rates:
US dollar 1.60
Euro 1.20
Swiss franc 1.53
Both fuel price and exchange rates are volatile in nature, and the assumptions used represent management's view of
reasonable average rates. Operating margins are sensitive to significant changes in these rates.
Cash flow projections beyond the forecast period have been extrapolated using growth rate scenarios ranging from zero up
to an estimated average of long-term economic growth rates for the principal countries in which easyJet operates. No
impairment resulted from any of these scenarios.
No reasonably possible combination of changes to the key assumptions above would result in the carrying value of the
cash-generating unit exceeding its recoverable amount.