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Accounting Policies

(continued)

RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS

2015

20

for the period ended 31 December 2015

Insurance premiums

Insurance premiums received or receivable from the insurer

are recognised in the income statement when incurred.

Claims

Claims incurred and reported are recognised in the income

statement when the loss events occur. Claims incurred but not

yet reported are estimated for compensation payable to the

insured and are recognised in the income statement.

Amount receivable from insurer

The amount receivable from the insurer is initially recognised at

the amount paid for the ordinary shares issued by the insurer.

The amount receivable from the insurer represents the right

to the residual interest in the cell captive and is after initial

recognition measured based on the net asset position of the

cell captive at the end of the reporting period. This amount is

reduced by dividends declared by the insurer.

The amount receivable from the insurer is assessed for

impairment at each reporting period. If there is objective

evidence that the amount receivable is impaired, the carrying

amount of the reinsurance asset is reduced to its recoverable

amount. The impairment loss is recognised in the income

statement.

1.9 Goodwill

Goodwillismeasuredatcostlessanyaccumulatedimpairment

losses. Goodwill is allocated to cash-generating units and is

not amortised, but tested annually for impairment and when

there is an indication of impairment.

1.10 Intangible Assets

Intangible assets that are acquired by the Group, which have

finite useful lives, are measured at cost less accumulated

amortisation and accumulated impairment losses.

Subsequent expenditure is capitalised only when it increases

the future economic benefits embodied in the specific asset to

which it relates. All other expenditure, including expenditure

on internally generated goodwill and brands, is recognised in

the income statement as incurred.

Expenditure on research activities is recognised as an

expense in the period in which it is incurred. An internally-

generated intangible asset arising from development (or from

the development phase of an internal project) is recognised if,

and only if, all of the following have been demonstrated:

• the intention to complete the intangible asset and use or sell it;

• the ability to use or sell the intangible asset;

• how the intangible asset will generate probable future

economic benefits;

• the availability of adequate technical, financial and

other resources to complete the development and to use

or sell the intangible asset;

• the ability to measure reliably the expenditure attributable

to the intangible asset during its development; and

• the technical feasibility of completing the intangible asset.

The amount initially recognised for internally-generated

intangible assets is the sum of the expenditure incurred

from the date when the intangible asset first meets the

recognition criteria listed above. Where no internally-

generated intangible asset can be recognised, development

expenditure is recognised in the income statement in

the period in which it is incurred. Subsequent to initial

recognition, internally-generated intangible assets are

reported at cost less accumulated amortisation and

accumulated impairment losses, on the same basis as

intangible assets acquired separately.

Client lists

Client lists acquired by the RCS Group are stated at historical

cost less accumulated amortisation and impairment losses.