AVESCOGROUPPLC ANNUAL REPORT 2009 49
www.avesco.com
The key assumptions used in the value in use calculations are as follows:
Presteigne
CT London CT US CT Germany Charter UK
Weighted average growth rate (1) 2.5% 2.5% 2.5% 2.5%
Pre-tax discount rate applied to projections (2) 15.0% 18.0% 19.5% 15.0%
(1) Revenue growth was based on management’s expectations of future economic and market conditions. Operating cash flows were calculated based on
management’s expectations of revenues and operating costs.
(2) The discount rates used are pre-tax and reflect specific risks relating to each CGU.
The assumptions have been used for the analysis of each CGU.
After performing testing, it was concluded that no acquired intangible assets were impaired during the period. However due to the change in market conditions
during the year, the initial estimate of the useful economic life of the acquired intangible assets has been reduced from 10 to 3 years. The change has been
reflected in the above figures and resulted in an additional amortisation charge of £325,000 in the year ended 30 September 2009.
19.Investments
a) Investments and principal subsidiaries
2009 2008
Company £000s £000s
At 1 October 33,710 33,710
Impairment (6,433) -
At 30 September 27,277 33,710
Investments in Group undertakings are recorded at cost which is the fair value of the consideration paid.
The impairment in respect of the Company investment in subsidiaries is the result of a reduction in the net assets position of InvestinMedia Holdings Ltd, a 100%
beneficially owned subsidiary, as a result of dividends paid from non-trading subsidiaries.
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