Page 48 - NZPM Annual Report 2017

NZPM GROUP ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

For the year ended 31 March 2017

12. INTANGIBLE ASSETS

2017 2016
$’000 $’000

Intangible assets carrying value comprises:
Software 1,971 1,843
Goodwill 6,890 6,890
Total carrying amount at the end of the year 8,861 8,733

Software
Cost 3,118 7,749
Accumulated amortisation and impairment losses (1,275) (4,640)
Carrying amount at the beginning of the year 1,843 3,109

Movements during the year:
Cost
Acquisitions 643 1,738
Disposals (50) (6,369)

Accumulated amortisation and impairment losses
Disposals 50 6,369
Amortisation for the year (515) (3,004)
Cost 3,711 3,118
Accumulated amortisation and impairment losses (1,740) (1,275)
Carrying amount at the end of the year 1,971 1,843

Goodwill
Cost 9,956 9,956
Accumulated impairment losses (3,066) (3,066)
Carrying amount at the end of the year 6,890 6,890

On 1 April 2016 NZPM Group replaced the ERP system software within its Plumbing World subsidiary. The
write-off of the remaining balance of the useful life of the old ERP system increased the amortisation charge,
(and decreased the net carrying amount), by $2,368,000 in the year 31 March 2016. There is no effect on the
current financial year.

(i) Impairment tests for goodwill
NZPM’s full owned group of companies are a single cash generating unit (CGU). The impairment test for
goodwill assesses the estimated value in use of the CGU and compares this to the carrying value. The value in
use was determined by discounting the future cash flows generated from the continuing use of the CGU. The
future cash flows were taken from the most recent strategic plan prepared by management and reviewed by
the board.

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