Notes 6-10
- 6 Segment information
- 7 Product sales information
- 8 Property, plant and equipment
- 9 Goodwill
- 10 Intangible assets
9 GOODWILL
| 2007 $m |
2006 $m |
2005 $m |
|
|---|---|---|---|
| Cost | |||
| At 1 January | 1,430 | 1,280 | 1,325 |
| Additions through business combinations | 8,757 | 116 | – |
| Exchange adjustments | 38 | 34 | (45) |
| At 31 December | 10,225 | 1,430 | 1,280 |
| Amortisation and impairment losses | |||
| At 1 January | 333 | 327 | 336 |
| Exchange adjustments | 8 | 6 | (9) |
| At 31 December | 341 | 333 | 327 |
| Net book value at 31 December | 9,884 | 1,097 | 953 |
Significant assets
| Description | Carrying value $m |
Remaining amortisation period |
|
|---|---|---|---|
| Goodwill in the US | Goodwill | 707 | Not amortised |
| Goodwill arising from the acquisition of MedImmune | Goodwill | 8,757 | Not amortised |
For the purposes of impairment testing of goodwill, the Group is regarded as a single cash-generating unit. The cash-generating unit’s recoverable amount is based on value in use using projections of the Group’s performance over 10 years, a period reflecting the patent-protected lives of our current products. The projections include assumptions about product launches, competition from rival products, pricing policy as well as the possibility of generics entering the market. The 10 year period is covered by internal budgets and forecasts. A risk-adjusted discount rate of 12% has been applied to the projections. Tests on a similar basis are also conducted at geographic-specific levels using proportionate allocations of cross-functional assets.
