Just group PLC | Annual Report and accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
13 INTANGIBLE ASSETS continued
Acquired intangible assets
Present value of in-force business £m
Intellectual property £m
Distribution network £m
Software £m
Leases £m
PrognoSys™ £m
Software £m
Total £m
Brand £m
Goodwill £m
Year ended 31 December 2021
Cost At 1 January 2021
34.9 200.0
26.6
5.6
2.0 11.1
2.0
5.9 18.4 306.5
Additions Disposals
– –
– –
–
–
– –
–
–
– –
6.6
6.6
(26.6)
(5.6)
(11.1)
(2.0)
– (45.3)
At 31 December 2021
34.9 200.0
–
–
2.0
–
–
5.9 25.0 267.8
Amortisation and impairment At 1 January 2021
(0.8)
(107.6)
(26.6)
(5.6)
(0.6)
(11.1)
(2.0)
(2.6)
(16.1) (173.0)
Disposals
– –
–
26.6
5.6
–
11.1
2.0
–
–
45.3
Charge for the year At 31 December 2021
(17.8)
– – – –
– – – –
(0.1) (0.7)
– – – –
– – – –
(0.5) (3.1)
(2.0)
(20.4)
(0.8) (125.4) 34.1 74.6 34.1 92.4
(18.1) (148.1) 6.9 119.7 2.3 133.5
Net book value at 31 December 2021 Net book value at 31 December 2020
1.3 1.4
2.8 3.3
The amortisation and impairment charge is recognised in other operating expenses in profit or loss.
Impairment testing Goodwill is tested for impairment in accordance with IAS 36, Impairment of Assets, at least annually.
The Group’s goodwill of £34.1m at 31 December 2022 represents £1.0m recognised on the 2018 acquisition of HUB Pension Consulting (Holdings) Limited, £0.3m recognised on the 2016 acquisition of the Partnership Assurance Group and £32.8m on the 2009 acquisition by Just Retirement Group Holdings Limited of Just Retirement (Holdings) Limited, the holding company of Just Retirement Limited (“JRL”). The existing goodwill has been allocated to the insurance segment as the cash-generating unit. The recoverable amounts of goodwill have been determined from value-in-use. The key assumptions of this calculation are noted below: 2022 2021 Period on which management approved forecasts are based 5 years 5 years Discount rate (pre-tax) 12.7% 10.5% The value-in-use of the insurance operating segment is considered by reference to the latest business plans over the next five years, which reflect management’s best estimate of future cash flows based on historical experience, expected growth rates and assumptions around market share, customer numbers, expense inflation and mortality rates, including an allowance for the mortality rates basis changes due to COVID-19. The discount rate was determined using a weighted average cost of capital approach, with appropriate adjustments to reflect a market participant’s view. The outcome of the impairment assessment is that the goodwill in respect of the insurance operating segment is not impaired and that the value-in-use is higher than the carrying value of goodwill.
Any reasonably possible changes in assumptions will not cause the carrying value of the goodwill to exceed the recoverable amounts.
Other intangible assets with finite useful economic lives are tested for impairment when there is an indication that the carrying value of the asset may be subject to an impairment. The Group’s PVIF of £56.7m at 31 December 2022 represents the present value of future profits from the purchased in-force business of £46.4m recognised on the 2016 acquisition of Partnership Assurance Group and £10.3m on the 2009 acquisition of Just Retirement (Holdings) Limited, the holding company of Just Retirement Limited. The remaining useful economic lives of the Group’s PVIF ranges from between two to three years. There are no indications of impairment of the carrying values of PVIF or other intangible assets with finite useful economic lives. PVIF is an intangible asset within the scope of IFRS 4 and is assessed at least annually, together with the insurance contract liabilities, which are subject to the required liability adequacy test.
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