Lendlease Annual Report 2024

Financial Statements 149 Section F. Other Notes 32. Intangible Assets Accounting Policies Goodwill represents the excess of the purchase price over the fair value of the Group’s share of the net identifiable assets and contingent liabilities of the acquired business at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets as goodwill. Goodwill on acquisition of associates is included in the carrying value of investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is not amortised. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. For the purposes of impairment testing, goodwill is allocated to cash generating units (CGUs) (or groups of CGUs) that are expected to benefit from the business combination in which the goodwill arose. CGUs are an identifiable group of assets that generate cash associated with the goodwill. Management considers this is an area of estimation uncertainty as these calculations involve an estimation of the recoverable amount of the CGU to which the goodwill is allocated. The Australian Construction CGU applies the value in use basis, and the Europe, Americas and Asia Construction CGUs use the fair value less costs of disposal basis. Both approaches require the Group to estimate the future cash flows expected to arise from the CGUs and a suitable discount rate in order to calculate the recoverable amounts. Management agreements and other intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses (see Note 7 ‘Other Expenses’ ). Amortisation is charged to the Income Statement on a straight line basis over the estimated useful lives of the intangible assets, ranging from three to 20 years. June 2024 June 2023 Note $m $m Goodwill 32.a 573 1,085 Management agreements 15 16 Other intangibles 1 104 135 Total intangible assets 692 1,236 1. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of capital from its offshore development project and assets. As a result of this strategy update and the impact to the Digital products, the recoverable amount of the Digital assets was reassessed and an impairment charge $16 million was recognised in Corporate Activities. At 30 June 2024, the remaining Digital assets was $55 million (30 June 2023: $51 million). 32.a. Goodwill June 2024 June 2023 Note $m $m Development - 34 Construction 573 1,051 Total goodwill 573 1,085 Reconciliations of the carrying amounts for each category of goodwill are as follows: Development Carrying amount at beginning of financial year 34 33 Impairment of goodwill 1 (34) - Effect of foreign exchange rate movements - 1 Carrying amount at end of financial year - 34 Construction Carrying amount at beginning of financial year 1,051 1,023 Impairment of goodwill 1 (479) - Other movement (2) - Effect of foreign exchange rate/other movements 3 28 Carrying amount at end of financial year 32.b 573 1,051 1. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of capital from its offshore development project and assets. As a result of this strategy update, the recoverable amount of the Construction and Development CGUs was reassessed to its fair value less costs of disposal and an impairment charge was recognised against the goodwill balance attributable to the Americas, Asia and Europe regions, writing the balance off in full.

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