RWS AR 23 Final Single pages - Flipbook - Page 132
Notes to the Consolidated Financial Statements (continued)
12. GOODWILL
Cost and net book value
At 1 October
Additions (Note 24)
2023
£m
2022
£m
692.6
615.8
12.9
7.8
(62.4)
-
-
(0.4)
Exchange adjustments
(34.5)
69.4
At 30 September
608.6
692.6
Impairment
Adjustments in respect of prior periods (Note 9)
Accounting policy
Goodwill arising on business combinations (representing the excess of fair value of the consideration given over
the fair value of the separable net assets acquired) is capitalised, and its subsequent measurement is based on
annual impairment reviews, with any impairment losses recognised immediately in pro昀椀t or loss in the statement of
comprehensive income. Direct costs of acquisition are recognised immediately in pro昀椀t or loss in the statement of
comprehensive income as an expense.
At least annually, or when otherwise required, the Directors review the carrying amounts of the Group’s property, plant
and equipment and intangible assets to determine whether there is any indication of an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment
loss. A full impairment review is performed annually for goodwill regardless of whether an indicator of impairment exists.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the
estimated future cash 昀氀ows are discounted to their present value using a pre-tax discount rate that re昀氀ects current
market assessments of the time value of money as well as risks speci昀椀c to the asset or CGU for which the estimates of
future cash 昀氀ows have not been adjusted.
If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of
the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately in
pro昀椀t or loss in the consolidated statement of comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but not beyond the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior-years. A reversal of an impairment loss is recognised
immediately as income in the Consolidated Statement of Comprehensive Income, although impairment losses relating
to goodwill may not be reversed.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out
on the smallest group of assets to which it belongs for which there are separately identi昀椀able cash 昀氀ows; its CGU.
Goodwill is allocated on initial recognition to each of the Group’s CGUs that are expected to bene昀椀t from the synergies
of the combination giving rise to the goodwill. Goodwill is allocated at the lowest level monitored by Management, and
no higher than an operating segment.
Key assumptions for the value in use
- 30 September 2023
Long-term
growth rate
Discount rate
Average
revenue growth
Average
EBITDA margin
IP Services
2.0%
14.3%
4.0%
29.7%
Regulated Industries
2.0%
15.2%
2.7%
21.9%
Language Services
2.0%
15.1%
2.9%
17.2%
Language and Content Technology
2.0%
17.4%
8.7%
36.3%
IP Services
2.0%
12.5%
3.2%
30.7%
Regulated Industries
2.0%
13.2%
6.7%
25.1%
Language Services
2.0%
12.7%
5.1%
20.4%
Language and Content Technology
2.0%
13.5%
10.9%
41.1%
Key assumptions for the value in use
- 30 September 2022
132
RWS Holdings plc — Annual Report 2023 NOTES TO THE CONSOLIDATED STATEMENTS
