AmazonScience/document-haystack

14 Summary of significant accounting policies (continued)24.2 Critical accounting estimates and judgements (continued)3Business combinations (continued)4On acquisition, any goodwill acquired is allocated to cash-generating units for the purpose of impairment testing. Where goodwill forms 5part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposal is 6included in the carrying amount of the assets when determining the gain or loss on disposal. On the current year acquisitions, any non-7controlling interests where put options are in place are recognised using the present access method where the Group assesses that the 8non-controlling shareholder has present access to the returns associated with their equity interests.9Impairment10On acquisition, any goodwill acquired is allocated to cash-generating units for the purpose of impairment testing. Where goodwill forms 11part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposal is 12included in the carrying amount of the assets when determining the gain or loss on disposal. 13An impairment review is performed for goodwill and other indefinite life assets on at least an annual basis. For all other non-current 14assets an impairment review is performed where there are indicators of impairment. This requires an estimation of the recoverable 15amount which is the higher of an asset’s fair value less costs to sell and its value in use. Estimating a value in use amount requires 16management to make an estimate of the expected future cash flows from each cash-generating unit and to discount cash flows by 17a suitable discount rate in order to calculate the present value of those cash flows. Estimating an asset’s fair value less costs to sell is 18determined using future cash flow and profit projections as well as industry observed multiples and publicly observed share prices for 19similar betting and gaming companies. See Note 14 for details on sensitivity analysis performed around these estimates.20Impairment losses are recognised in the consolidated income statement and during the current year, the Group has recognised an 21impairment charge of £289.0m primarily against the Group’s Australian CGU, the closed B2C operations in Africa, and under the Unirkn 22B2C offering. See Note 14 for further details.234.3 Other accounting policies24‘Put’ options over the equity of subsidiary companies25The potential cash payments related to put options issued by the Group over the equity of subsidiary companies are accounted for as 26financial liabilities. The amounts that may become payable under the option on exercise are initially recognised at the present value 27of the expected gross obligation with the corresponding entry being recognised in retained earnings. Such options are subsequently 28measured at amortised cost, using the effective interest method, in order to accrete the liability up to the amount payable under the 29option at the date at which it first becomes exercisable. The present value of the expected gross obligation is reassessed at the end of 30each reporting period and any changes are recorded in the income statement. In the event that an option expires unexercised, the liability 31is derecognised with a corresponding adjustment to retained earnings.32Intangible assets33Intangible assets acquired separately are capitalised at cost and those acquired as part of a business combination are capitalised 34separately from goodwill. The costs relating to internally generated intangible assets, principally software costs, are capitalised if the 35criteria for recognition as assets are met. Other expenditure is charged in the year in which the expenditure is incurred. Following initial 36recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. 37The useful lives of these intangible assets are assessed to be either finite or indefinite. Indefinite lived assets are not amortised and 38are subject to an annual impairment review from the year of acquisition. Where amortisation is charged on assets with finite lives, this 39expense is taken to the consolidated income statement through the ‘operating expenses, depreciation and amortisation’ line item. 40The useful lives applied to the Group’s intangible assets are as follows: 41Exclusive New Zealand licence 25–year duration of licence42Other licences Lower of 15 years, or duration of licence43Software – purchased & internally capitalised costs 2–15 years44Trademarks & brand names 10–25 years, or indefinite life45Customer relationships 3–15 years46The useful lives of all intangible assets are reviewed at each financial period end. Impairment testing is performed annually for intangible 47assets which are not subject to systematic amortisation and where an indicator of impairment exists for all other intangible assets.48An intangible asset is derecognised on disposal, with any gain or loss arising (calculated as the difference between the net disposal 49proceeds and the carrying amount of the item) included in the consolidated income statement in the year of disposal.50Pensions and other post-employment benefits51The Group’s defined benefit pension plan holds assets separately from the Group. The pension cost relating to the plan is assessed in 52accordance with the advice of independent qualified actuaries using the projected unit credit method. 53Actuarial gains or losses are recognised in the consolidated statement of comprehensive income in the period in which they arise.54Any past service cost is recognised immediately. The retirement benefit asset recognised in the balance sheet represents the fair value of 55scheme assets less the value of the defined benefit obligations. 561 Overview 8 Strategic report 88 Governance 140  Financial statements57Entain plc Annual Report 2023 16758Notes to the consolidated  59financial statements 60for the year ended  6131 December 2023