Cathay Pacific 2009 Annual Report Download - page 69

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11. Intangible assets
Group Company
Goodwill
HK$M
Computer
systems
HK$M
Total
HK$M
Computer
systems
HK$M
Cost
At 1st January 2009 7,666 692 8,358 667
Additions – 100 100 97
At 31st December 2009 7,666 792 8,458 764
At 1st January 2008 7,666 682 8,348 642
Additions – 26 26 –
Disposals – (16) (16) 25
At 31st December 2008 7,666 692 8,358 667
Accumulated amortisation
At 1st January 2009 – 576 576 551
Charge for the year – 32 32 31
At 31st December 2009 – 608 608 582
At 1st January 2008 – 566 566 526
Charge for the year – 26 26 25
Disposals – (16) (16) –
At 31st December 2008 – 576 576 551
Net book value
At 31st December 2009 7,666 184 7,850 182
At 31st December 2008 7,666 116 7,782 116
The carrying amount of goodwill allocated to the airline operation is HK$7,627 million (2008: HK$7,627 million). In
accordance with HKAS 36 “Impairment of Assets” the Group completed its annual impairment test for goodwill
allocated to the Group’s various cash generating units (“CGUs”) by comparing their recoverable amounts to their
carrying amounts as at the reporting date. The recoverable amount of a CGU is determined based on value-in-use
calculations. These calculations use cash flow projections based on five-year financial budgets, with reference to
past performance and expectations for market development, approved by management. Cash flows beyond the five-
year period are extrapolated with an estimated general annual growth rate which does not exceed the long-term
average growth rate for the business in which the CGU operates. The discount rates used of approximately 10%
(2008: 10%) are pre-tax and reflect specific risk related to the relevant segments. Management believes that any
reasonably foreseeable change in any of the above key assumptions would not cause the carrying amount of
goodwill to exceed the recoverable amount.
Notes to the Accounts STATEMENT OF FINANCIAL POSITION
Cathay Pacific Airways Limited Annual Report 2009 67