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Notes to the financial statements year ended 31 March 2010

3. Judgements and estimation uncertainty

Revenue recognition

An appropriate proportion of revenue is deferred to future periods when the Group has obligations extending to future periods. As a result, judgement is required in assessing the extent and associated costs of fulfilling those future obligations. The Group uses historical experience and forecast activity levels in determining the appropriate amount of revenue to recognise in the current period and how much to defer to future periods.

Impairment of goodwill and acquisition intangible assets

The annual impairment assessment in respect of goodwill and acquisition intangibles requires estimates of the value in use (or fair value less costs to sell) of cash-generating units to which goodwill and acquisition intangibles have been allocated. As a result, estimates of future cash flows are required, together with an appropriate discount factor for the purpose of determining the present value of those cash flows. The carrying value of goodwill is £190,186,000 (2009: £175,667,000). The carrying value of acquisition intangibles is £27,931,000 (2009: £28,643,000). Following the annual impairment review, an impairment charge of £nil (2009: £59,179,000) has been recorded against goodwill and £nil (2009: £16,965,000) against acquisition intangibles. As set out in note 14, reasonably possible changes in respect of commercial outcomes around sales volumes, prices and margins can impact the recoverable value.

Pensions

The Group participates in a defined benefit retirement scheme for certain employees. The scheme assets and liabilities are valued by an independent qualified actuary using the assumptions summarised in note 39. As required by IAS 19, the value of the defined benefit obligation has been measured using the projected unit credit method which requires the use of judgement and estimation.