Notes to the Financial Statements
Impairment testing Goodwill and intangible assets that have indefinite useful lives are tested at least annually for impairment. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or CGUs). An impairment loss is recognised when the goodwill carrying amount exceeds the CGU’s recoverable amount. 4.2 Recoverability of intangible assets and goodwill Goodwill and client book intangibles The goodwill and intangibles primarily arose from the acquisition of: • the business of Community and Corporate Pty Limited in April 2009; • ClearView Group Holdings Pty Limited in June 2010; • Matrix Planning Solutions Limited in October 2014; and • other business combinations where ClearView Wealth Limited was the acquirer. The goodwill that arose on acquisition was allocated across the Financial Advice, Life Insurance and Wealth Management CGU’s of the Group based on the expected synergies expected to be gained by each CGU within the Group. At the balance date the goodwill of $4.0 million was allocated to the Life Insurance segment. As a result of the Wealth Management divestment, the goodwill of $8.5 million recognised within the Wealth Management CGU’s has been impaired since 31 December 2023 and the impairment is part of the disposal group. See section 8.5 for detail. The goodwill recognised within the Life Insurance CGU’s is tested for impairment triggers using the embedded value methodology by comparing the carrying value of goodwill to the in-force portfolios written to date. The recoverable amount for the Life Insurance CGU’s has been determined based on the embedded value calculations as at 30 June 2024. The embedded value is a calculation that represents the economic value of the shareholder capital in the business and the future profits expected to emerge from the business currently in-force expressed in today’s dollars. No account is taken of future new business in the embedded value calculations.
which are capable of reliable measurement. Capitalised costs are amortised on a straight-line basis over the estimated useful life of the asset, commencing at the time the asset is first put into use or held ready for use, whichever is the earlier. Capitalisation of configuration and customisation costs in SaaS arrangements In implementing SaaS arrangements, the Group has developed software code that enhances, modifies and creates additional capability to the software to which it owns the intellectual property. This software increases the functionality of the SaaS arrangement cloud-based application and includes a new underwriting rules engine, front end portal and integrations with existing ERP systems. Judgement has been applied in determining whether the changes to the owned software meets the definition of and recognition criteria for an intangible asset in accordance with AASB 138 Intangible Assets. During the financial year, the Group recognised $9.2 million (2023: $11.2 million) as intangible assets in respect of customisation and configuration costs incurred in implementing SaaS arrangements. These intangible assets are amortised on a straight-line basis over the useful life of 10 years. As at 30 June 2024, the accumulated amortisation of $5.0 million (30 June 2023: $2.0 million) has been recognised for the intangible assets in use. Client books Client book intangibles represent the value of the in-force insurance and investment contracts and funds management revenues. Each client book has its own assessment of useful life depending on the nature of the clients in each segment and their relative characteristics, based on age, demographics and type of product to which it relates. The policy adopted to write-off the client books resembles the anticipated aging profile of the revenue stream. Amortisation Intangible assets with finite useful lives are amortised on a straight-line basis over the useful life of the intangible asset. The estimated useful lives are generally: 2024 2023
Up to 3 years, with major core software infrastructure amortised over a period up to 10 years
Up to 3 years, with major core software infrastructure amortised over a period up to 10 years
Software
Client books 6–10 years
6–10 years Indefinite
Goodwill
Indefinite
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ClearView Wealth Limited
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