Barclays 2012 Annual Report Download - page 277

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24 Goodwill and intangible assets
Accounting for goodwill and other intangible assets
Goodwill
The carrying value of goodwill is determined in accordance with IFRS 3 Business Combinations and IAS 36 Impairment of Assets.
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures, and represents the excess of the fair value of the purchase
consideration over the fair value of the Group’s share of the assets acquired and the liabilities and contingent liabilities assumed on the date of
the acquisition.
Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have occurred. The test
involves comparing the carrying value of goodwill with the present value of the pre-tax cash flows, discounted at a rate of interest that reflects
the inherent risks, of the cash generating unit to which the goodwill relates, or the cash generating unit’s fair value if this is higher.
Intangible assets
The accounting standard that the Group applies in accounting for intangible assets other than goodwill is IAS 38 Intangible Assets.
Intangible assets include brands, customer lists, internally generated software, licences and other contracts and core deposit intangibles. They
are initially recognised when they are separable or arise from contractual or other legal rights, the cost can be measured reliably and, in the
case of intangible assets not acquired in a business combination, where it is probable that future economic benefits attributable to the assets
will flow from their use.
Intangible assets are stated at cost (which is, in the case of assets acquired in a business combination, the acquisition date fair value) less
amortisation and provision for impairment, if any, and are amortised over their useful lives in a manner that reflects the pattern to which they
contribute to future cash flows, generally over 4-25 years.
Intangible assets are reviewed for impairment when there are indicators that impairment may have occurred.
Goodwill
£m
Internally
generated
software
£m
Other
software
£m
Core
deposit
intangibles
£m
Brands
£m
Customer
lists
£m
Licences
and other
£m
Total
£m
2012
Cost
As at 1 January 2012 6,697 1,437 328 287 166 1,724 444 11,083
Additions and disposals 29 446 115 (21) (1) 19 34 621
Exchange and other movements (141) (39) 35 (23) (16) (105) (2) (291)
As at 31 December 2012 6,585 1,844 478 243 149 1,638 476 11,413
Accumulated amortisation and impairment
As at 1 January 2012 (1,392) (694) (114) (114) (106) (615) (202) (3,237)
Disposals – 32 5 21 1 1 5 65
Amortisation charge – (162) (52) (11) (18) (152) (40) (435)
Impairment charge – (8) – – – – (2) (10)
Exchange and other movements 13 23 3 8 12 49 11 119
As at 31 December 2012 (1,379) (809) (158) (96) (111) (717) (228) (3,498)
Net book value 5,206 1,035 320 147 38 921 248 7,915
2011
Cost
As at 1 January 2011 7,259 1,091 234 347 202 1,686 473 11,292
Additions and disposals (210) 375 98 (1) – 144 (19) 387
Exchange and other movements (352) (29) (4) (59) (36) (106) (10) (596)
As at 31 December 2011 6,697 1,437 328 287 166 1,724 444 11,083
Accumulated amortisation and impairment
As at 1 January 2011 (1,040) (552) (86) (121) (109) (493) (194) (2,595)
Disposals 210 2 5 – – – 23 240
Amortisation charge – (157) (35) (13) (18) (158) (38) (419)
Impairment charge (597) (4) – – – – – (601)
Exchange and other movements 35 17 2 20 21 36 7 138
As at 31 December 2011 (1,392) (694) (114) (114) (106) (615) (202) (3,237)
Net book value 5,305 743 214 173 60 1,109 242 7,846
barclays.com/annualreport Barclays PLC Annual Report 2012 I 275