132 JUST GROUP PLC Annual Report and Accounts 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
13 INTANGIBLE ASSETS
PrognoSys™ and other intellectual property £m
Present value of in-force business £m
Distribution network £m
Software £m
Leases £m
Total £m
Brand £m
Goodwill £m
Year ended 31 December 2019
Cost At 1 January 2019
34.9 200.0
26.6
5.6
7.9
26.1
2.0 303.1
–
–
–
–
–
3.3
–
3.3
Additions
At 31 December 2019
34.9 200.0
26.6
5.6
7.9
29.4
2.0 306.4
Amortisation and impairment At 1 January 2019
(0.8)
(71.9) (17.8) (89.7)
(25.7)
(5.6)
(2.0) (0.6) (2.6)
(24.1)
(2.0)
(132.1)
–
(0.9)
–
(0.6)
–
(19.9)
Charge for the year At 31 December 2019
(0.8)
(26.6)
(5.6)
(24.7)
(2.0)
(152.0)
Net book value at 31 December 2019 Net book value at 31 December 2018
34.1 110.3 34.1 128.1
–
– –
5.3 5.9
4.7 2.0
– –
154.4 171.0
0.9
PrognoSys™ and other intellectual property £m
Present value of in-force business £m
Distribution network £m
Software £m
Leases £m
Total £m
Brand £m
Goodwill £m
Year ended 31 December 2018
Cost At 1 January 2018
33.9
200.0
26.6
5.6
7.4 0.5 7.9
25.4
2.0
300.9
Additions
1.0
–
–
–
0.7
–
2.2
At 31 December 2018
34.9
200.0
26.6
5.6
26.1
2.0
303.1
Amortisation and impairment At 1 January 2018
(0.8)
(54.0) (17.9) (71.9)
(22.4)
(5.6)
(1.4) (0.6) (2.0)
(21.2)
(2.0)
(107.4) (24.7) (132.1)
Charge for the year At 31 December 2018
–
(3.3)
–
(2.9)
–
(0.8)
(25.7)
(5.6)
(24.1)
(2.0)
Net book value at 31 December 2018 Net book value at 31 December 2017
34.1 33.1
128.1 146.0
0.9 4.2
– –
5.9 6.0
2.0 4.2
– –
171.0 193.5
Amortisation and impairment charge 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 2019 represents £1.0m recognised on the 2018 acquisition of Corinthian Group 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: 2019 2018 Period on which management approved forecasts are based 5 years 5 years Discount rate (pre-tax) 10.3% 10.0% The value-in-use of the insurance operating segment is considered by reference to latest business plans over the next five years, which reflect management’s best estimate of future profits based on historical experience, expected growth rates and assumptions around market share, customer numbers, expense inflation and mortality rates. A stressed scenario that assumes no growth in sales for the next five years and discount rate of 20% is also considered. The outcome of the impairment assessment under both scenarios 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 and net assets.
Any reasonably possible changes in assumption will not cause the carrying value of the goodwill to exceed the recoverable amounts.
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