Vodafone 2014 Annual Report Download - page 161

28. Acquisitions and disposals
We made a number of acquisitions during the year including the acquisition of a controlling interest
in KabelDeutschland Holding AG and the remaining interest in our business in Italy, Vodafone Omnitel B.V.
thus obtaining control. The note below provides details of these transactions as well as those in the prior year.
For further details see “Critical accounting judgements” in note 1 “Basis of preparation” to the consolidated
nancial statements.
Accounting policies
Business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values
at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued by the Group. Acquisition-related costs are
recognised in the income statement as incurred. The acquiree’s identiable assets and liabilities are recognised at their fair values at the acquisition
date. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree
and the fair value of the Group’s previously held equity interest in the acquiree, if any, over the net amounts of identiable assets acquired and
liabilities assumed at the acquisition date. The interest of the non-controlling shareholders in the acquiree may initially be measured either at fair
value or at the non-controlling shareholders’ proportion of the net fair value of the identiable assets acquired, liabilities and contingent liabilities
assumed. The choice of measurement basis is made on an acquisition-by-acquisition basis.
Acquisition of interests from non-controlling shareholders
In transactions with non-controlling parties that do not result in a change in control, the difference between the fair value of the consideration paid
or received and the amount by which the non-controlling interest is adjusted is recognised in equity.
Acquisitions
The aggregate cash consideration in respect of purchases of interests in subsidiaries, net of cash acquired, is as follows:
£m
Cash consideration paid:
Kabel Deutschland Holding AG (including fees of £17 million) 4,872
Other acquisitions completed during the year 6
4,878
Net cash acquired (599)
4,279
In addition, the Group acquired a 100% interest in Vodafone Omnitel B.V. as part of the disposal of the Group’s interest in Verizon Wireless for
consideration of £7,121 million. The purchase consideration has been determined based on the acquisition-date fair value of the equity in Vodafone
Omnitel B.V., being considered to be a more reliable method of determining fair value than estimating the attributable proportion of the fair value
of the investment in Verizon Wireless. The equity value has been determined on a value in use basis using discounted estimated cash ows using the
methodology and assumptions detailed in note 4 “Impairment losses”.
Total goodwill acquired was £6,859 million and included £3,848 million in relation to Kabel Deutschland Holding AG, £3,007 million in relation
to Vodafone Omnitel B.V. and £4 million in relation to other acquisitions completed during the year. Acquisitions and disposals (continued)
159Overview Strategy review Performance Governance Financials Additional information