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Wiley IFRS: Practical Implementation Guide and Workbook
12.4 BARLOWORLD
Notes to the Consolidated Annual Financial Statements for the Year Ended September 30
3. Goodwill
2006
2005
2004
Rm
Rm
Rm
2006
COST
At I October
2,899
3.294
1.935
Accumulated amortisation neued against cost per IFRS
3
(47 1)
Additions
226
138
1,410
Disposals
(II )
(17)
Translation differences
382
-ID)
----ill)
At
30
September
3 496
2,899
3294
ACCUMULATED IMPAIRMENT LOSSES
At I October
414
86 1
627
Accumulated amortisationnelled against cost per IFRS
3
(471)
Charge for the year
148
Additions
2
Disposals
Impairment
13
24
III
Translation differences
-.M
-
ill)
At
30
September
12.l
414
861
CARRYING AMOUNT
At
30
September
3,005
2,485
2,433
Per business segment:
Continuing operations
Equipment
232
188
195
Industrial distribution
328
261
279
Motor
1,446
1,228
1,191
Cement
382
384
369
Coatings
43
3 1
31
Scientific
326
255
265
Corporate and other
248
-ill
---..lill
Total continuing operations
3,005
2,485
2,433
Discontinued operation-Steel tube
_ _0
__0
__0
Total group
3.Q(li
2485
2433
The impairments relate to the following:
Finaltair joint venture
13
Truck Center (Freightliner)
24
80
Barloworld motor dealerships in Australia
27
Other items
--
__4
--
13
24
Jll
Goodwill is alloca ted to groups of cash-generating units based on gro up business segme nts (re–
fer to note I).
The group has not recognised any significan t intangible assets with indefinite useful lives .
During the current year, all significant recoverable amounts were based on value in use. A dis–
counted cash flow valuation model is applied using three-year strategic plans as approved by man–
agement. The financial plans are the quantification of strateg ies derived from the use of a common
strategic plannin g proce ss followed across the group . The process ensures that all significant risks
and sensitivities are appropriately considered and factored into strateg ic plans. Key assumptions are
based on industry spec ific performance levels as well as eco nomic indicators approved by the ex–
ecutive. These assumptions are generally consistent with ex ternal sources of information.
Cash flows for the terminal value beyo nd the explicit forecast period of three years is estimated
by using eco nomic returns (CFROI)®, asse t base, growth rate, and fade princ iples . Growth rates are
aligned to the long-term sustainable level of grow th in the economic region in which cash–
generating units operate.
Discount rates applied to cash flow projections are based on a country- or region-specific rea l
cost of capital, depend ent upon the location of cash-ge nera ting segment operations. The cos t of
capital is adju sted for size and leverage and other known risks.