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2015

RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS

21

1.10 Intangible Assets (continued)

Client lists (continued)

Amortisation is recognised in the income statement on a

straight-line basis over the estimated useful lives of the client

lists. The annual rate for the amortisation is 20%.

Computer software

Computer software acquired by the RCS Group is stated at

historical cost less accumulated amortisation and impairment

losses. Amortisation is recognised in the income statement

on a straight-line basis over the estimated useful lives of

intangible assets. The annual rate for the amortisation is 33%.

The above amortisation rates are consistent with the

comparative period. Amortisation methods, useful lives and

residual values are reassessed at each reporting date.

1.11 Impairment

Non-derivative financial assets

A financial asset not classified as at fair value through profit or

loss is assessed at each reporting date to determine whether

there is any objective evidence that it is impaired. A financial

asset is considered to be impaired if objective evidence

indicates that one or more events have had a negative effect

on the estimated future cash flows of that asset, that can be

reliably measured.

An impairment loss in respect of a financial asset measured

at amortised cost is calculated as the difference between its

carrying amount and the present value of the estimated future

cash flows discounted at the original effective interest rate.

Individually significant financial assets are tested for

impairment on an individual basis. Those found not to be

specifically impaired are then collectively assessed for any

impairment that has been incurred but not yet identified.

Assets that are not individually significant are collectively

assessed for impairment by grouping together assets with

similar credit risk characteristics.

All impairment losses are recognised in the income statement.

An impairment loss is reversed if the reversal can be related

objectively to an event occurring after the impairment loss

was recognised. For financial assets measured at amortised

cost the reversal is recognised in the income statement.

Non-financial assets

The carrying values of the RCS Group’s non-financial

assets, other than deferred tax assets, are reviewed at each

reporting date to determine whether there is any indication

of impairment. If any such indication exists then the asset’s

recoverable amount is estimated. For goodwill and intangible

assets that have indefinite useful lives or that are not yet

available for use, the recoverable amount is estimated at each

reporting date.

An impairment loss is recognised if the carrying amount of

an asset or its cash-generating unit exceeds its recoverable

amount. A cash-generating unit is the smallest identifiable

asset group that generates cash flows that are largely

independent fromother assets and groups. Impairment losses

are recognised in the income statement. Impairment losses

recognised in respect of cash-generating units are allocated

first to goodwill and then to reduce the carrying amount of the

other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit

is the greater of its value in use and its fair value less costs

to sell. In assessing value in use, the estimated future cash

flows are discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the

time value of money and the risks specific to the asset.

An impairment loss in respect of goodwill is not reversed. In

respect of other assets, impairment losses recognised in prior

periods are assessed at each reporting date for any indications

that the loss has decreased or no longer exists. An impairment

loss is reversed if there has been a change in the estimates

used to determine the recoverable amount. An impairment

loss is reversed only to the extent that the asset’s carrying

Accounting Policies

(continued)

for the period ended 31 December 2015