|
Consolidated |
Company |
||||
|
2007 |
2006 |
2007 |
2006 |
||
|
$000 |
$000 |
$000 |
$000 |
||
|
16. Intangible assets |
|||||
|
Goodwill, at cost |
182,401 |
185,352 |
4,146 |
- |
|
|
Acquired technology |
|||||
|
At cost |
3,398 |
3,702 |
- |
- |
|
|
Accumulated amortisation |
(1,982) |
(1,234) |
- |
- |
|
|
1,416 |
2,468 |
- |
- |
||
|
Enterprise resource planning system |
|||||
|
At cost |
20,366 |
13,091 |
16,984 |
9,179 |
|
|
Accumulated amortisation |
(12,005) |
(10,545) |
(9,441) |
(9,093) |
|
|
8,361 |
2,546 |
7,543 |
86 |
||
|
Customer relationships |
|||||
|
At cost |
4,801 |
5,433 |
- |
- |
|
|
Accumulated amortisation |
(2,838) |
(1,826) |
- |
- |
|
|
1,963 |
3,607 |
- |
- |
||
|
Intellectual property capitalised, at cost(i) |
- |
6,788 |
- |
- |
|
|
Capitalised development expenditure |
|||||
|
At cost |
7,759 |
7,385 |
7,759 |
7,385 |
|
|
Accumulated amortisation |
(5,915) |
(3,345) |
(5,915) |
(3,345) |
|
|
1,844 |
4,040 |
1,844 |
4,040 |
||
|
Other intangible assets |
|||||
|
At cost |
496 |
583 |
- |
- |
|
|
Accumulated amortisation |
(213) |
(146) |
- |
- |
|
|
283 |
437 |
- |
- |
||
|
Total intangible assets |
196,268 |
205,238 |
13,533 |
4,126 |
|
(i) Intellectual property is not amortised on the basis that it has not yet reached the condition necessary for it to be capable of operating in the manner intended by the Consolidated Entity.
|
Consolidated |
Company |
||||
|
2007 |
2006 |
2007 |
2006 |
||
|
$000 |
$000 |
$000 |
$000 |
||
|
Reconciliations |
|||||
|
Reconciliations of the carrying amounts of each class ofintangible assets are set out below: |
|||||
|
Goodwill |
|||||
|
Carrying amount at beginning of financial year |
185,352 |
168,002 |
- |
- |
|
|
Acquisitions through business combinations |
12,099 |
- |
4,146 |
- |
|
|
Effect of movements in foreign exchange |
(15,050) |
17,350 |
- |
- |
|
|
Carrying amount at end of financial year |
182,401 |
185,352 |
4,146 |
- |
|
|
Acquired technology |
|||||
|
Carrying amount at beginning of financial year |
2,468 |
3,056 |
- |
- |
|
|
Amortisation |
(850) |
(926) |
- |
- |
|
|
Effects of movements in foreign exchange |
(202) |
338 |
- |
- |
|
|
Carrying amount at end of financial year |
1,416 |
2,468 |
- |
- |
|
|
Enterprise resource planning system |
|||||
|
Carrying amount at beginning of financial year |
2,546 |
5,039 |
86 |
2,000 |
|
|
Acquisitions |
7,805 |
706 |
7,805 |
- |
|
|
Amortisation |
(1,659) |
(3,366) |
(348) |
(1,914) |
|
|
Effect of movements in foreign exchange |
(331) |
167 |
- |
- |
|
|
Carrying amount at end of financial year |
8,361 |
2,546 |
7,543 |
86 |
|
|
Customer relationships |
|||||
|
Carrying amount at beginning of financial year |
3,607 |
4,585 |
- |
- |
|
|
Amortisation |
(1,201) |
(1,238) |
- |
- |
|
|
Effect of movements in foreign exchange |
(443) |
260 |
- |
- |
|
|
Carrying amount at end of financial year |
1,963 |
3,607 |
- |
- |
|
|
Intellectual property capitalised, at cost |
|||||
|
Carrying amount at beginning of financial year |
6,788 |
6,825 |
- |
- |
|
|
Disposals |
(6,274) |
- |
- |
- |
|
|
Effect of movements in foreign exchange |
(514) |
(37) |
- |
- |
|
|
Carrying amount at end of financial year |
- |
6,788 |
- |
- |
|
|
Capitalised development expenditure |
|||||
|
Carrying amount at beginning of financial year |
4,040 |
6,263 |
4,040 |
6,263 |
|
|
Development phase expenditure |
375 |
179 |
375 |
179 |
|
|
Amortisation |
(2,571) |
(2,402) |
(2,571) |
(2,402) |
|
|
Carrying amount at end of financial year |
1,844 |
4,040 |
1,844 |
4,040 |
|
|
Consolidated |
Company |
||||
|
2007 |
2006 |
2007 |
2006 |
||
|
$000 |
$000 |
$000 |
$000 |
||
|
Other intangible assets |
|||||
|
Carrying amount at beginning of financial year |
437 |
559 |
- |
- |
|
|
Amortisation |
(95) |
(116) |
- |
- |
|
|
Effect of movements in foreign exchange |
(59) |
(6) |
- |
- |
|
|
Carrying amount at end of financial year |
283 |
437 |
- |
- |
|
Amortisation charge
The amortisation charge is recognised in the administration expenses line except for amortisation of capitalised development expenditure which is recognised in the research and development expenses line in the income statement.
Impairment tests for cash generating units containing goodwill
The following units have significant carrying amounts of goodwill:
|
Consolidated |
Company |
||||
|
2007 |
2006 |
2007 |
2006 |
||
|
$000 |
$000 |
$000 |
$000 |
||
|
Americas |
65,437 |
69,721 |
1,940 |
- |
|
|
Europe |
109,603 |
109,518 |
1,488 |
- |
|
|
Asia Pacific |
7,361 |
6,113 |
718 |
- |
|
|
182,401 |
185,352 |
4,146 |
- |
||
The recoverable amount of each cash generating unit is based on value-in-use calculations. Those calculations use cash flow projections based on actual operating results and the three year business plan. Cash flows for a further two year period are extrapolated using a 3.5% per annum growth rate and are appropriate because the related acquisitions are long-term businesses. This growth rate is consistent with the long-term average growth rate for the industry. A post-tax discount rate of 9.7% per annum has been used in discounting the projected cash flows.
The key assumptions and the approach to determining their value in the current period are:
| Assumption | How determined |
| Discount rate | Based on weighted average cost of capital |
| Sales volume growth rate | Based on a three year forecast taking into account historical growth rates and product lifecycle |
| Terminal value growth rate | Based on a three year forecast taking into account historical growth rates and product lifecycle. |
The recoverable amount of each cash generating unit including unallocated corporate assets is in excess of their carrying amounts and therefore no impairment charge was required. Any adverse change in assumptions could reduce the recoverable amount below the carrying amount.
