14 Intangible assets continued
The carrying value of customer contractual relationships is tested annually for impairment based on the recoverable amount which is
considered to be the higher of the fair value or value in use. The asset’s value in use is considered to be the best indication of its recoverable
amount. Value in use is calculated for customer contractual relationships in the same manner as described above for goodwill and the same
discount rate used. The results of this testing show that no impairment is due.
Capitalised software and development costs are amortised when the assets become available for use on a straight-line basis over the
expected useful life of the asset. The carrying value of software and development costs is reviewed for impairment on an ongoing basis
by reference to the stage and expectation of a project. No impairment is due as at 31 December 2012.
The amortisation charge for the year includes £4,302,000 (2011: £3,634,000) relating to capitalised internally generated software costs
and is included in operational expenses in the consolidated income statement.
The net book value of capitalised internally generated software costs at 31 December 2012 was £23,293,000 (2011: £20,445,000).
There are no charges for impairment during the current or prior financial year.
At 31 December 2012 there were £13,505,000 of assets under development on which no amortisation has been charged (2011: £8,873,000).
15 Property, plant and equipment
Furniture
fittings and
Land and Leasehold equipment
buildings improvements Vehicles and art Total
£000 £000 £000 £000 £000
At 1 January 2011
Cost 6,104 3,162 258 44,678 54,202
Accumulated depreciation (340) (986) (150) (32,984) (34,460)
Net book amount 5,764 2,176 108 11,694 19,742
Year ended 31 December 2011
Opening net book amount 5,764 2,176 108 11,694 19,742
Additions – 584 – 2,075 2,659
Disposals – (21) (58) (186) (265)
Depreciation charge (82) (292) – (3,771) (4,145)
Foreign exchange movements 60 40 – 64 164
Closing net book amount 5,742 2,487 50 9,876 18,155
At 31 December 2011
Cost 6,164 3,765 142 45,560 55,631
Accumulated depreciation (422) (1,278) (92) (35,684) (37,476)
Net book amount 5,742 2,487 50 9,876 18,155
Year ended 31 December 2012
Opening net book amount 5,742 2,487 50 9,876 18,155
Additions – 260 80 2,876 3,216
Disposals – – (27) (90) (117)
Depreciation charge (77) (391) (33) (1,756) (2,257)
Impairment (491) – – – (491)
Foreign exchange movements (170) (138) – (143) (451)
Closing net book amount 5,004 2,218 70 10,763 18,055
At 31 December 2012
Cost 5,498 3,816 114 43,743 53,171
Accumulated depreciation (494) (1,598) (44) (32,980) (35,116)
Net book amount 5,004 2,218 70 10,763 18,055
The Group’s land and buildings assets relate to freehold property in the UK and US.
The impairment charge of £491,000 in the year is included in operational expenses in the consolidated income statement (2011: £nil).
Assets with a net book value of £nil were held under finance leases (2011: £nil).
During the year no expenditure was recognised in the carrying value of property that is under the course of construction (2011: £nil).
Notes to the consolidated financial statements Hiscox Ltd Report and Accounts 2012 83