Page 82 - Beeks Financial Cloud Group Annual Report 2021

80 Beeks Financial Cloud Group PLC For the year ended 30 June 2021

Notes to the Consolidated Financial Statements

The carrying value of goodwill by each CGU is as follows:
2021 2020
£000 £000

Beeks Analytics 883 1,846
Retail 109 122
Institutional 376 420
Total goodwill 1,368 2,388

The recoverable amount of all Management performed a full that reflects current market
CGUs has been determined by impairment assessment on the assessments of the time value
using value-in-use calculations, goodwill of Beeks Analytics. This of money and the risks specific
estimating future cash inflows included including modelling to these asset, of 12% and 14.5%
and outflows from the use of the projected cash flows based was used. Based on an analysis
assets and applying an appropriate on the current weighted sales of the impairment calculation’s
discount rates to those cash flows pipeline, a discount rate based on sensitivities to changes in
to ensure that the carrying value the calculated pre-tax weighted key parameters (growth rate,
of each individual asset is still average cost of capital (15.5%) and discount rate and post-tax cash
appropriate. cost base assumptions that included flow projections) there was no
contingency and investment to reasonably possible scenario
In performing these reviews, deliver against the weighted sales where these recoverable amounts
under the requirements of pipeline. A mid-term growth rate would fall below their carrying
IAS 36 “Impairment of Assets” (post sales pipeline) from year 2 amounts therefore as at 30 June
management prepare forecasts was assumed at 3% and a terminal 2021, no change to the impairment
for future trading over a useful life value of 2% was used following provision against the carrying value
period of up to five years. the 5 year cash flow projection. of intangibles was required for
Sensitivities were then performed institutional or retail goodwill. The
These cash flow projections are against a range of possible revaluation of these from prior
based on financial budgets and downside scenarios including further year represents exchange
market forecasts approved by weighting against the sales pipeline adjustment only.
FINANCE
management using a number of and changing of the discount rate.
assumptions including; It was noted that a 1% change on
/ Historic and current trading the discount rate would impact the
/ Weighted sales pipeline future net present value of the future
/ Potential changes to cost base cash flows by £0.2m.
(including staff to support the
CGU) Management concluded, based
/ External factors including on the range of possible outcomes,
competitive landscape and and sensitivity of both the sales
market growth potential pipeline and discount rate, that an
impairment charge of £1.0m should
Forecasts that go beyond the be processed against goodwill.
approved budgets are based on
long term growth rates on a For institutional and retail goodwill,
macro-economic level. a pre-tax discount discount rate,