HSBC 2012 Annual Report Download - page 465

463
Overview
Operating & Financial Review
Corporate Governance
Financial Statements
Shareholder Information
23 Goodwill and intangible assets
At 31 December
2012 2011
US$m US$m
Goodwill ................................................................................................................................................... 21,390 21,338
Present value of in-force long-term insurance business (‘PVIF’)1 .......................................................... 4,847 4,092
Other intangible assets .............................................................................................................................. 3,616 3,604
29,853 29,034
1 Disclosures on PVIF are provided on page 243.
Goodwill
Reconciliation of goodwill
Europe
Hong
Kong
Rest of
Asia-
Pacific MENA
North
America
Latin
America Total
US$m US$m US$m US$m US$m US$m US$m
Gross amount
At 1 January 2012 ................................. 14,433 124 1,063 63 8,747 3,765 28,195
Disposals ............................................... (2) (4) (5) – – (21) (32)
Exchange differences ............................ 229 (6) (38) (3) – 23 205
Reclassified to held for sale .................. – – – – (408) (121) (529)
At 31 December 2012 ........................... 14,660 114 1,020 60 8,339 3,646 27,839
Accumulated impairment losses
At 1 January 2012 ................................. – – – – (6,857) – (6,857)
Reclassified to held for sale .................. – – – – 408 – 408
At 31 December 2012 ........................... – – – – (6,449) – (6,449)
Net carrying amount at
31 December 2012 ........................... 14,660 114 1,020 60 1,890 3,646 21,390
Gross amount
At 1 January 2011 ................................. 14,885 124 1,115 65 12,465 4,316 32,970
Disposals ............................................... (3) – – – – (46) (49)
Exchange differences ............................ (449) – (35) (2) (1) (272) (759)
Reclassified to held for sale .................. – – – – (3,717) (231) (3,948)
Other changes ....................................... – – (17) – – (2) (19)
At 31 December 2011 ........................... 14,433 124 1,063 63 8,747 3,765 28,195
Accumulated impairment losses
At 1 January 2011 ................................. – – – – (10,564) – (10,564)
Reclassified to held for sale .................. – – – – 3,707 – 3,707
At 31 December 2011 ........................... – – – – (6,857) – (6,857)
Net carrying amount at
31 December 2011 ........................... 14,433 124 1,063 63 1,890 3,765 21,338
Impairment testing
Timing of impairment testing
HSBC’s impairment test in respect of goodwill allocated to each cash-generating unit (‘CGU’) is performed as at
1 July each year. In line with the accounting policy set out in Note 2(p), goodwill is also retested for impairment
whenever there is an indication that it may be impaired. For the purpose of impairment testing, the Group’s CGUs are
based on geographical regions subdivided by global business. The CGUs represent the lowest level at which goodwill
is monitored for internal management purposes. The GB&M-Europe CGU experienced significantly reduced
profitability in the second half of 2012 and was retested for impairment as at 31 December 2012. For other CGUs
there was no indication of impairment in the period to 31 December 2012 and therefore goodwill has not been
retested since 1 July 2012.