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Aviva plc
Annual Report and
Accounts 2007
156
Financial
statements
Notes to the consolidated financial statements continued
16 – Goodwill
This note analyses the changes to the carrying amount of goodwill during the year, and details the results of our
impairment testing on both goodwill and intangible assets with indefinite lives.
(a) Carrying amount
2007 2006
£m £m
Gross amount
At 1 January 3,086 2,359
Acquisitions 115 761
Movements in contingent consideration (5) 32
Disposals (16) (8)
Foreign exchange rate movements 93 (58)
At 31 December 3,273 3,086
Accumulated impairment
At 1 January (176) (85)
Impairment losses (10) (94)
Disposals 9–
Foreign exchange rate movements (14) 3
At 31 December (191) (176)
Carrying amount at 31 December 3,082 2,910
Movements in contingent consideration relate to contingent consideration paid/received in respect of past acquisitions
of subsidiaries. Goodwill arising on acquisitions completed before 1 January 1998 was charged directly to reserves.
Goodwill arising on the Group’s acquisition of joint ventures and associates is included within the carrying value of those
investments (see notes 18 and 19).
(b) Goodwill allocation and impairment testing
A summary of the goodwill and intangibles with indefinite useful lives allocated to cash-generating units is
presented below.
Carrying amount of intangibles
with indefinite useful lives
Carrying amount of goodwill (detailed in note 17) Total
2007 2006 2007 2006 2007 2006
£m £m £m £m £m £m
United Kingdom
Long-term business 71 50 ––71 50
General insurance and health (see (i) below) 316 314 185 185 501 499
RAC non-insurance operations (see (ii) below) 892 892 36 36 928 928
Other 68 77 ––68 77
Europe
France (long-term business) (see (iii) below) ––45 42 45 42
Ireland
Long-term business (see (iv) below) 101 91 ––101 91
General insurance and health (see (v) below) 81 74 ––81 74
Italy
Long-term business (see (vi) below) 46 11 254 –300 11
General insurance and health (see (vi) below) 42 22 132 –174 22
Netherlands (see (vii) below) 212 163 ––212 163
Spain (long-term business) (see (viii) below) 552 518 ––552 518
Other 19 11 – – 19 11
North America
United States (long-term business) (see (ix) below) 624 635 ––624 635
Canada 17 15 ––17 15
Asia Pacific
Various 41 37 ––41 37
3,082 2,910 652 263 3,734 3,173
As explained in accounting policy N, the carrying amount of goodwill and intangible assets with indefinite useful lives is
reviewed at least annually or when circumstances or events indicate there may be uncertainty over this value. The tests led
to impairment of goodwill of £10 million.
Goodwill and intangibles with indefinite useful lives have been tested for impairment in these businesses as follows: