|
12.
INTANGIBLE ASSETS
| |
|
|
Goodwill |
|
|
Telecommunication
licences and other |
|
|
Brands,
customer lists, and relationships |
|
|
Computer
software |
a |
|
Total |
|
| |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
|
|
At
1 April 2005
|
|
|
404 |
|
|
197 |
|
|
84 |
|
|
1,160 |
|
|
1,845 |
|
|
Additions
|
|
|
– |
|
|
– |
|
|
– |
|
|
592 |
|
|
592 |
|
|
Disposals
and adjustments
|
|
|
– |
|
|
– |
|
|
– |
|
|
8 |
|
|
8 |
|
|
Exchange
differences
|
|
|
18 |
|
|
8 |
|
|
– |
|
|
8 |
|
|
34 |
|
|
Acquisitions
through business combinations
|
|
|
121 |
|
|
1 |
|
|
22 |
|
|
16 |
|
|
160 |
|
|
|
|
At
1 April 2006
|
|
|
543 |
|
|
206 |
|
|
106 |
|
|
1,784 |
|
|
2,639 |
|
|
Additions
|
|
|
– |
|
|
– |
|
|
– |
|
|
807 |
|
|
807 |
|
|
Disposals
and adjustments
|
|
|
– |
|
|
(15 |
) |
|
– |
|
|
(104 |
) |
|
(119 |
) |
|
Exchange
differences
|
|
|
(20 |
) |
|
(10 |
) |
|
– |
|
|
(12 |
) |
|
(42 |
) |
|
Acquisitions
through business combinations
|
|
|
296 |
|
|
4 |
|
|
12 |
|
|
12 |
|
|
324 |
|
|
|
|
At
31 March 2007
|
|
|
819 |
|
|
185 |
|
|
118 |
|
|
2,487 |
|
|
3,609 |
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
1 April 2005
|
|
|
|
|
|
51 |
|
|
– |
|
|
415 |
|
|
466 |
|
|
Charge
for the year
|
|
|
|
|
|
9 |
|
|
11 |
|
|
230 |
|
|
250 |
|
|
Acquisitions
|
|
|
|
|
|
– |
|
|
– |
|
|
15 |
|
|
15 |
|
|
Disposals
and adjustments
|
|
|
|
|
|
– |
|
|
– |
|
|
(8 |
) |
|
(8 |
) |
|
Exchange
differences
|
|
|
|
|
|
2 |
|
|
– |
|
|
6 |
|
|
8 |
|
|
|
|
At
1 April 2006
|
|
|
|
|
|
62 |
|
|
11 |
|
|
658 |
|
|
731 |
|
|
Charge
for the year
|
|
|
|
|
|
11 |
|
|
13 |
|
|
360 |
|
|
384 |
|
|
Acquisitions
|
|
|
|
|
|
1 |
|
|
– |
|
|
7 |
|
|
8 |
|
|
Disposals
and adjustments
|
|
|
|
|
|
(8 |
) |
|
– |
|
|
(73 |
) |
|
(81 |
) |
|
Exchange
differences
|
|
|
|
|
|
(7 |
) |
|
– |
|
|
(10 |
) |
|
(17 |
) |
|
|
|
At
31 March 2007
|
|
|
|
|
|
59 |
|
|
24 |
|
|
942 |
|
|
1,025 |
|
|
|
|
Carrying
amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
31 March 2007
|
|
|
819 |
|
|
126 |
|
|
94 |
|
|
1,545 |
|
|
2,584 |
|
|
|
|
At
31 March 2006
|
|
|
543 |
|
|
144 |
|
|
95 |
|
|
1,126 |
|
|
1,908 |
|
|
|
| a |
Includes
additions in 2007 of £741 million (2006:
£544 million) in respect of internally developed
computer software.
|
Impairment
tests of goodwill
During the
2007 financial year the group made a number of acquisitions.
INS, Counterpane and I3IT have been fully integrated
into BT Global Services, which is considered to be the
relevant cash generating unit (CGU). The group also
acquired dabs.com and PlusNet, for which the relevant
CGUs are considered to be the Enterprises and Consumer
divisions of BT Retail, respectively. In addition, the
group reorganised its structure with effect from 1 April
2006 such that the Irish operations were transferred
from BT Global Services to BT Retail and BT Ireland
now also represents a separate CGU. For the purposes
of goodwill impairment testing, the group therefore
had four relevant CGUs at 31 March 2007. These are the
smallest identifiable groups of assets that generate
cash inflows that have goodwill and are largely independent
of the cash inflows from other assets or groups of assets.
Goodwill
is allocated to the group’s CGUs as follows:
|
|
|
|
|
|
BT
Retail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
BT
Global Services |
|
|
Consumer |
|
|
Enterprises |
|
|
BT
Ireland |
|
|
Total |
|
| |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
|
|
At
1 April 2005
|
|
|
360 |
|
|
– |
|
|
37 |
|
|
7 |
|
|
404 |
|
|
Acquisition
through business combinations
|
|
|
111 |
|
|
– |
|
|
1 |
|
|
9 |
|
|
121 |
|
|
Exchange
differences
|
|
|
17 |
|
|
– |
|
|
1 |
|
|
– |
|
|
18 |
|
|
|
|
At
1 April 2006
|
|
|
488 |
|
|
– |
|
|
39 |
|
|
16 |
|
|
543 |
|
|
Acquisition
through business combinations
|
|
|
223 |
|
|
57 |
|
|
16 |
|
|
– |
|
|
296 |
|
|
Exchange
differences
|
|
|
(20 |
) |
|
– |
|
|
– |
|
|
– |
|
|
(20 |
) |
|
|
|
At
31 March 2007
|
|
|
691 |
|
|
57 |
|
|
55 |
|
|
16 |
|
|
819 |
|
|
|
The recoverable
amount of each CGU is based on value in use calculations.
These are determined using cash flow projections derived
from financial budgets approved by the board covering
a four year period. They reflect management’s expectation
of revenue growth, operating costs and margin for each
CGU based on past experience. Cash flows beyond the
four year period have been extrapolated using estimated
terminal growth rates ranging from 0% to 2%. These rates
have been determined with regard to projected growth
rates for the specific markets in which the CGU participates
and are not considered to exceed the long term average
growth rates for those markets. Discount rates applied
to the cash flow forecasts are derived from the group’s
pre-tax weighted average cost of capital for regulated
and non-regulated products. The discount rates applied
range from 10.0% to 11.4%.
The
forecasts are most sensitive to changes in projected
revenue growth rates in the first four years of the
forecast period. However there is significant headroom
and based on the sensitivity analysis performed we have
concluded that no reasonably possible changes in the
base case assumptions would cause the carrying amount
of the CGUs to exceed their recoverable amount.
|
