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NOTES TO THE
FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2015

2.4 Intangible assets (continued)
Computer software

Computer software comprises software purchased from third parties, and also the cost of internally developed software.
Computer software is stated at cost less accumulated amortisation and accumulated impairment losses. These costs are
amortised to income statement using the straight-line method over their estimated useful lives of 2 years to 5 years.

Subsequent expenditure on capitalised intangible assets is added to the carrying value only when it increases the future
economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in income statement
as incurred.

Computer software integral to a related item of equipment is accounted for as property, plant and equipment.

Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.

2.5 Impairment

The carrying amounts of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount
is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (“CGU”) exceeds its
recoverable amount. Impairment losses are recognised in the income statement unless it reverses a previous revaluation, in
which case it is charged to other comprehensive income.

For goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use, the recoverable amount
is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its related CGU
exceeds its estimated recoverable amounts.

Impairment losses recognised in respect of CGU are allocated first to reduce the carrying amount of any goodwill allocated to
the CGU (group of units) and then, to reduce the carrying amount of other assets in the CGU (group of units) on a pro rata basis.

Calculation of recoverable amount
The recoverable amount of an asset or its CGU is the greater of its value-in-use and its fair value less costs to sell. In assessing

value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or CGU.

For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is
determined for the CGU to which the asset belongs. For the purpose of goodwill impairment testing, CGUs to which goodwill
has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level within the
Group at which goodwill is monitored for internal reporting purposes.

An impairment loss in respect of an associate is measured by comparing the recoverable amount of the investment with its
carrying amount. An impairment loss is recognised in profit or loss. An impairment loss is reversed if there has been a favourable
change in the estimates used to determine the recoverable amount.

Reversals of impairment
An impairment loss recognised in prior periods for an asset other than goodwill is reversed if there has been a change in the

estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised. All reversals of impairment are recognised in the income statement.