Aviva 2009 Annual Report Download - page 185

183
Performance review
Aviva plc Notes to the consolidated financial statements continued
Corporate responsibility
Annual Report and Accounts 2009
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
18 – Interests in, and loans to, joint ventures continued
AvivaSA Emeklilik ve Hayat A.S.
The Group’s investment in AvivaSA Emeklilik ve Hayat A.S. has been tested for impairment by comparing its carrying value (which
includes goodwill which arose on its acquisition) with its recoverable amount.
The recoverable amount has been determined based on a value in use calculation.
This calculation is an actuarially-determined appraisal value and is based on the embedded value of the business together with
the present value of expected profits from future new business. The recoverable amount exceeds the carrying value of the cash
generating unit including goodwill.
Key assumptions used for the calculation were:
— Embedded value represents the shareholder interest in the life business and is calculated in accordance with the Market
Consistent Embedded Value (MCEV) principles. The embedded value is the total of the net worth of the life business and
the value of the in-force business. The underlying methodology and assumptions have been reviewed by a firm of
actuarial consultants.
— New business contribution represents the present value of projected future distributable profits generated from business written
in a period. This is initially based on the most recent three year business plans approved by management.
— Growth rate represents the rate used to extrapolate new business contributions beyond the business plan period, and is based
on management’s estimate of future growth of 5.0%.
— Risk adjusted discount rate of 15.0% represents the rate used to discount expected profits from future new business. The
discount rate reflects a risk margin to make prudent allowance for the risk that experience in future years for new business may
differ from that assumed.
(e) Additional information
Summarised aggregate financial information on the Group’s interests in its joint ventures is as follows:
2009 2008 2007
£m £m £m
Income, including unrealised (losses)/gains on investments (105) (876) 242
Expenses (293) (153) (579)
Share of results before tax (398) (1,029) (337)
Long-term assets 2,885 3,115 4,263
Current assets 645 529 395
Share of total assets 3,530 3,644 4,658
Long-term liabilities (1,982) (1,968) (1,684)
Current liabilities (376) (434) (762)
Share of total liabilities (2,358) (2,402) (2,446)
Share of net assets 1,172 1,242 2,212
The joint ventures have no significant contingent liabilities to which the Group is exposed, nor has the Group any significant
contingent liabilities in relation to its interests in them.
Financial statements IFRS