Goodwill

Goodwill arising on consolidation is capitalised in the balance sheet at cost and amortised through the profit and loss account on a straight line basis over its useful economic life. The gain or loss on subsequent disposal of a subsidiary or associated undertaking will include any attributable unamortised goodwill.

Prior to 1998, purchased goodwill was eliminated against reserves. As permitted under the transitional arrangements of FRS 10, such amounts previously written off to reserves have not been reinstated as an asset, but will be charged to the profit and loss account on disposal of the business to which they relate.