10 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.

 

PILTB insurance contracts
2014
£m

PILTB investment contracts
2014
£m

Other intangible assets
2014
£m

Total
2014
£m

Cost

 

 

 

 

As at 1 January

336

111

268

715

Acquisition of subsidiaries

25

13

38

Additions

55

55

Net exchange difference

11

2

13

As at 31 December

347

138

336

821

 

 

 

 

 

Accumulated amortisation and impairment

 

 

 

 

As at 1 January

(308)

(45)

(54)

(407)

Amortisation for the year

(9)

(8)

(33)

(50)

Impairment loss

(7)

(5)

(12)

Net exchange difference

(11)

1

(10)

As at 31 December

(328)

(60)

(91)

(479)

 

 

 

 

 

Net book value as at 31 December

19

78

245

342

 

 

 

 

 

To be amortised within 12 months

 

 

 

65

To be amortised after 12 months

 

 

 

277

 

PILTB insurance contracts
2013
£m

PILTB investment contracts
2013
£m

Other intangible
assets
2013
£m

Total
2013
£m

Cost

 

 

 

 

As at 1 January

331

77

174

582

Acquisition of subsidiaries

34

58

92

Additions

36

36

Net exchange difference

5

5

As at 31 December

336

111

268

715

 

 

 

 

 

Accumulated amortisation and impairment

 

 

 

 

As at 1 January

(303)

(38)

(30)

(371)

Amortisation for the year

(8)

(7)

(24)

(39)

Net exchange difference

3

3

As at 31 December

(308)

(45)

(54)

(407)

 

 

 

 

 

Net book value as at 31 December

28

66

214

308

 

 

 

 

 

To be amortised within 12 months

 

 

 

50

To be amortised after 12 months

 

 

 

258