Marks and Spencer 2008 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2008 Marks and Spencer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

76 MARKS AND SPENCER GROUP PLC
Notes to the financial statements
continued
13 Intangible assets Computer
software
Computer under
Goodwill Brands software development Total
£m £m £m £m £m
At 2 April 2006
Cost or valuation 69.5 80.0 42.3 6.7 198.5
Accumulated amortisation – (8.0) (27.0) – (35.0)
Net book value 69.5 72.0 15.3 6.7 163.5
Year ended 31 March 2007
Opening net book value 69.5 72.0 15.3 6.7 163.5
Additions – – 0.3 46.2 46.5
Transfers – – 25.9 (25.9) –
Disposals – – (0.1) (1.6) (1.7)
Amortisation charge – (5.3) (8.9) – (14.2)
Closing net book value 69.5 66.7 32.5 25.4 194.1
At 31 March 2007
Cost or valuation 69.5 80.0 51.2 25.4 226.1
Accumulated amortisation – (13.3) (18.7) – (32.0)
Net book value 69.5 66.7 32.5 25.4 194.1
Year ended 29 March 2008
Opening net book value 69.5 66.7 32.5 25.4 194.1
Additions 48.4 – 18.6 65.1 132.1
Acquisition of subsidiaries – – 0.6 – 0.6
Transfers – – 12.5 (12.5) –
Amortisation charge – (5.4) (15.9) – (21.3)
Closing net book value 117.9 61.3 48.3 78.0 305.5
At 29 March 2008
Cost or valuation 117.9 80.0 82.9 78.0 358.8
Accumulated amortisation – (18.7) (34.6) – (53.3)
Net book value 117.9 61.3 48.3 78.0 305.5
Goodwill of £69.5m relates to the acquisition of per una, which was acquired in October 2004. £34.3m of goodwill relates to the
acquisition of Marks and Spencer Marinopoulos B.V. in February 2008 and a further £14.1m of goodwill was recognised in March
2008 on the acquisition of COMS a.s. Goodwill is not amortised, but tested annually for impairment with the recoverable amount
being determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the
discount rate, growth rates and changes in income and costs.
The Group prepares discounted cash flow forecasts based on financial forecasts approved by management covering a three-year
period, which takes account of both past performance and expectations for future market developments. Cash flows beyond this
three-year period are extrapolated using a growth rate of 2.0%, which does not exceed the long-term average growth rate for the
Group’s retail businesses. Management estimates the discount rate using a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to retail businesses. A pre-tax discount rate of 9.5% has been used.
Brands consist of the per una brand which is being amortised on a straight-line basis over a period of 15 years.