39 Purchased interest in long term businesses (PILTB) and other intangible assets.

Portfolios of in-force insurance or investment contracts acquired either directly or through the acquisition of a subsidiary undertaking are capitalised at fair value. The value of business acquired represents the present value of anticipated future profits in acquired contracts. These amounts are amortised over the anticipated lives of the related contracts in the portfolio.

Intangible assets acquired via business combinations, such as the value of customer relationships, are recognised at fair value and are subsequently amortised over their useful life in line with the expected emergence of profit from the business. Where software costs are separately identifiable and measurable they are capitalised at cost and amortised over their expected useful life.

Purchased interest in long term businesses and other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

(XLS:) Purchased interest in long term businesses (PILTB) and other intangible assets

 

PILTB insurance contracts
2012
£m

PILTB investment contracts
2012
£m

Other intangible assets
2012
£m

Total
2012
£m

PILTB insurance contracts
2011
£m

PILTB investment contracts
2011
£m

Other intangible assets
2011
£m

Total
2011
£m

1.

During 2011 the impairment loss of £15m represented a diminution of the value in use of the Snow + Rock Sports Limited brand arising from the deterioration in the retail sales environment. The impairment charge is presented on the face of the consolidated income statement within other expenses and is largely offset by transfers to the unallocated divisible surplus as the Group’s control of the vehicle arises from holdings within the with-profits part of the UK LTF. The value in use was estimated using a discounted cash flow model using a discount rate of 12%.

Cost

 

 

 

 

 

 

 

 

As at 1 January

340

77

88

505

339

77

54

470

Acquisition of subsidiaries

54

54

19

19

Additions

32

32

15

15

Net exchange difference

(9)

(9)

1

1

As at 31 December

331

77

174

582

340

77

88

505

Amortisation and impairment

 

 

 

 

 

 

 

 

As at 1 January

(302)

(32)

(23)

(357)

(286)

(25)

(2)

(313)

Amortisation for the year

(10)

(6)

(7)

(23)

(13)

(7)

(6)

(26)

Impairment loss1

(15)

(15)

Net exchange difference

9

9

(3)

(3)

As at 31 December

(303)

(38)

(30)

(371)

(302)

(32)

(23)

(357)

Net book value as at
31 December

28

39

144

211

38

45

65

148

To be amortised within 12 months

 

 

 

33

 

 

 

28

To be amortised after 12 months

 

 

 

178

 

 

 

120