Strategic report Governance Financial statements Other information SECTION 2: ASSETS AND LIABILITIES NOTES TO THE GROUP FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONTINUED 2.2 Other intangible assets continued The amortisation charge above is included in operating costs in the income statement. Costs relating to an asset that is not yet fully available for use by the business, are classified as internally developed software and are reviewed for impairment at least annually. No issues have The impairment incurred in the year relates to the write off of a single item of internally developed been noted in the current year. In accordance with the provisions of IAS 38 the costs are capitalised advice software, for which there is no longer an intended future use. It has been written off in full and as an intangible asset and subsequently amortised over the estimated useful life of the systems of net book value of £1.1m has been recorded in operating costs in the income statement. eight years, starting from the date at which the assets are put into use. The customer lists are a separately acquired intangible asset and do not include any internally Impairment of intangible assets excluding goodwill generated element. The remaining amortisation period for these assets is six to eight years. At the end of each reporting period, the Group reviews the carrying amounts of its tangible and Computer software includes externally acquired licences and internally generated system intangible assets to determine whether there is any indication that those assets have suffered an improvements. Commitments in respect of intangible assets are shown in note 5.3. impairment loss. If any indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the loss. Where the asset does not generate cash flows, independent from 2.3 Property, plant and equipment other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. Recoverable amount is the higher of fair value, less costs to sell, and value in use. Property, plant and equipment are stated at cost less accumulated depreciation and any If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying recognised impairment loss. Cost includes the original purchase price of the asset and the costs amount of the asset is reduced to its recoverable amount and an impairment loss is recognised as attributable to bringing the asset to working condition for its intended use. an expense immediately. Property, plant and equipment now includes both owned and leased assets. Owned assets are measured initially at cost and subsequently at cost less accumulated depreciation. Leased, or right Internally of use, assets are measured initially at the present value of all future lease payments, less any Customer Computer developed prepaid or accrued rent or incentives and any expected dilapidation cost being the initial value. list software software Total £m £m £m £m Subsequently, leased assets are measured at initial value less accumulated depreciation. Cost Depreciation is charged based on the estimates of useful economic lives and expected residual At 1 July 2019 3.8 17.4 17.7 38.9 Additions 0.8 0.7 8.7 10.2 values, which are reviewed annually, for all plant and equipment, except for leased assets which are At 30 June 2020 4.6 18.1 26.4 49.1 depreciated on a straight line basis over their economic lives. Management determines the useful Asset reclassification (2.8) 2.8 lives and residual values for assets when they are acquired, based on experience with similar assets – – Additions – 1.2 11.6 12.8 and taking into account other relevant factors, such as any expected changes in technology. The Disposals – (0.7) (0.4) (1.1) charge is calculated to write off the cost or valuation, less estimated residual value, of each asset Impairment – – (1.3) (1.3) evenly using a straight line method over its estimated useful life as follows: At 30 June 2021 4.6 15.8 39.1 59.5 Accumulated amortisation Computer hardware – over three to ten years. At 1 July 2019 0.3 11.6 4.0 15.9 Office equipment (includes fixtures and leasehold improvements) – overthree to ten years. Charge 0.5 2.3 2.4 5.2 Right of use assets – over the term of the associated lease. At 30 June 2020 0.8 13.9 6.4 21.1 Charge 0.4 1.6 4.1 6.1 The carrying values of plant and equipment are reviewed for impairment when events or changes Disposals – (0.7) (0.4) (1.1) in circumstances indicate that the carrying value may not be recoverable. The gain or loss arising Impairment – – (0.2) (0.2) on the disposal or retirement of an asset is determined as the difference between the sales At 30 June 2021 1.2 14.8 9.9 25.9 proceeds and the carrying amount of the asset and is recognised in the income statement. Carrying amount At 30 June 2021 3.4 1.0 29.2 33.6 At 30 June 2020 3.8 4.2 20.0 28.0 At 1 July 2019 3.5 5.8 13.7 23.0 153 Hargreaves Lansdown Report and Financial Statements 2021