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110
MARKS AND SPENCER GROUP PLC
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
14 INTANGIBLE ASSETS
Goodwill
£m
Brands
£m
Computer
software
£m
Computer
software under
development
£m
Total
£m
At 30 March 2013
Cost or valuation 127.0 112.4 613.4 183.2 1,036.0
Accumulated amortisation and impairment (34.4) (45.2) (261.4) – (341.0)
Net book value 92.6 67.2 352.0 183.2 695.0
Year ended 29 March 2014
Opening net book value 92.6 67.2 352.0 183.2 695.0
Additions 3.3 – 128.0 72.6 203.9
Transfers – – 137.4 (137.4) –
Amortisation charge – (5.3) (84.3) – (89.6)
Exchange di erence (0.7) – (0.2) – (0.9)
Closing net book value 95.2 61.9 532.9 118.4 808.4
At 29 March 2014
Cost or valuation 129.6 112.4 878.6 118.4 1,239.0
Accumulated amortisation and impairment (34.4) (50.5) (345.7) – (430.6)
Net book value 95.2 61.9 532.9 118.4 808.4
Year ended 28 March 2015
Opening net book value 95.2 61.9 532.9 118.4 808.4
Additions – 0.1 79.4 98.5 178.0
Transfers – – 130.1 (130.1) –
Disposals – – (1.4) – (1.4)
Asset write-o s – – (2.4) (1.2) (3.6)
Amortisation charge – (5.3) (117.4) – (122.7)
Exchange di erence 0.1 – (0.4) (0.2) (0.5)
Closing net book value 95.3 56.7 620.8 85.4 858.2
At 28 March 2015
Cost or valuation 129.7 112.5 1,087.7 86.6 1,416.5
Accumulated amortisation and impairment (34.4) (55.8) (466.9) (1.2) (558.3)
Net book value 95.3 56.7 620.8 85.4 858.2
Goodwill and indefi nite life intangibles relate to the following business units:
per una
£m
Marks and
Spencer
Czech Republic
a.s.
£m
Supreme
Trademarks
Private
Limited
(India)
£m
Marks and
Spencer
(Hungary)
KFT
£m
Total
goodwill
£m
M&S Mode
indefi nite life
intangible
£m
Net book value at 29 March 2014 69.5 15.5 6.9 3.3 95.2 32.4
Exchange di erence – (0.1) 0.2 – 0.1 –
Net book value at 28 March 2015 69.5 15.4 7.1 3.3 95.3 32.4
Impairment testing
Goodwill is not amortised, but tested annually for impairment with the recoverable amount being determined from value in use
calculations. Goodwill has been allocated for impairment testing purposes to groups of cash-generating units (CGUs) which include
the combined retail and wholesale businesses for each location.
Brands include the per una brand cost of £80.0m (net book value £24.2m) and the M&S Mode brand cost of £32.4m. The per una brand is a
defi nite life intangible asset and is amortised on a straight-line basis over a period of 15 years and is only assessed for impairment where
such indicators exist. The M&S Mode brands have been attributed an indefi nite life as they give the Group the future right to use the ‘M&S’
brand across Europe. This is consistent with the Group’s expansion plans in Europe and existing M&S brand recognition from its current
presence. Similar to goodwill, the M&S Mode brands are assessed for impairment annually based on their value in use. The M&S Mode brands
have been allocated for impairment testing across the European business.
The value in use calculations use cash fl ows based on detailed fi nancial budgets prepared by management covering a three-year period.
These budgets have regard to historical performance and knowledge of the current market, together with management’s views on the
future achievable growth and the impact of committed initiatives. The cash fl ows which derive from the budgets include ongoing capital
expenditure required to maintain the store network. Cash fl ows beyond this three-year period are extrapolated using a long-term
growth rate.
The key assumptions in the value in use calculations are the long-term growth rate and the risk adjusted pre-tax discount rate. The long-
term growth rate has been determined with reference to forecast GDP growth for the territories in which these businesses operate.
Management believes this is the most appropriate indicator of long-term growth rates that is available. The long-term growth rate used
is purely for the impairment testing of goodwill and brands under IAS 36 ‘Impairment of Assets’ and does not refl ect long-term planning
assumptions used by the Group for investment proposals or for any other assessments. These growth rates do not exceed the long-term
average growth rate for the Groups’ retail businesses. The pre-tax discount rate is based on the Group’s weighted average cost of capital,
taking into account the cost of capital and borrowings, to which specifi c market-related premium adjustments are made.