(10a) Goodwill
Business combinations are accounted for using the acquisition method. Goodwill arises on the acquisition of subsidiaries and is determined as the positive difference between the consideration transferred (purchase price) and the Group’s share of the fair value of the identifiable assets and liabilities of the acquiree at the acquisition date. Goodwill is not amortised, but is tested annually, and more frequently if there are indicators of impairment, for impairment.
For the purposes of this impairment test, goodwill is allocated at the acquisition date to cash-generating units (CGUs) or groups of CGUs that are expected to benefit from the relevant business combination. A CGU is the lowest level within the Group at which goodwill is monitored for internal management purposes and at which individual cash flows can be identified.
Negative goodwill (bargain purchase) arising from a business combination is recognised immediately as income in the statement of profit or loss, after reassessment of the identification and measurement of the acquired assets and liabilities.
(10b) Other intangible assets
Intangible assets acquired by the Group with finite useful lives are measured at cost, less accumulated amortisation and accumulated impairment losses.
(10c) Amortisation of other intangible assets
The other intangible assets are amortised through the statement of profit or loss on a straight-line basis over the expected useful lives of the intangible assets and undergo periodic impairment testing (see accounting policy 17). The estimated useful lives of the intangible asset categories are as follows:
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Customer base: 5-20 years
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Order book: 1-4 years
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Brand name: 5-10 years
(10d) Expenses after initial recognition
After initial recognition, expenditure relating to intangible assets, other than goodwill, is capitalised only if it is expected to lead to an increase in the future economic benefits attributable to the specific asset. All other expenditure is recognised as an expense in the statement of profit or loss in the period in which it is incurred.