222
PERENNIAL REAL ESTATE HOLDINGS LIMITED
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
7 INTANGIBLE ASSETS AND GOODWILL
Management
Goodwill
contracts
Total
$’000
$’000
$’000
Group
Cost
At 1 July 2013, 30 June 2014 and 1 July 2014
–
–
–
Acquisitions (note 4)
63,155
28,244
91,399
At 31 December 2015
63,155
28,244
91,399
Accumulated amortisation
At 1 July 2013, 30 June 2014 and 1 July 2014
–
–
–
Amortisation charge for the period
–
(3,295)
(3,295)
At 31 December 2015
–
(3,295)
(3,295)
Carrying amounts
At 30 June 2014
–
–
–
At 31 December 2015
63,155
24,949
88,104
Amortisation
The amortisation of management contracts is included in administrative expenses.
Impairment testing for CGUs containing goodwill
For the purposes of impairment testing, goodwill has been allocated to the Group’s CGU as follows:
31/12/2015
30/6/2014
$’000
$’000
Management business
63,155
–
The recoverable amount of this CGU was determined based on value-in-use, estimated using discounted cash flows.
The fair value measurement was categorised as a Level 3 fair value based on the inputs in the valuation technique used
(see note 2.4).
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key
assumptions represent management’s assessment of future trends in the relevant industries and have been based on
historical data from both external and internal sources.
31/12/2015
30/6/2014
%
%
Discount rate
9.6 – 11.4
–
Terminal value growth rate
3.0 – 5.0
–
Budgeted EBITDA growth rate
3.0 – 5.0
–
