All language subtitles for KPMG Walkthroughs - Intangibles-20250523_110345-Meeting Recording

you were last year if you sort of walk
us through the end -to -end process so

how they're presented to the gf talk
committee um calculation of

amortization um how impairments
calculated um any sort of approval

along the way um and um how it's
recorded as well

okay so to just be clear i guess there's
kind of two There's two

parts to this kind of conversation.

The first one would be the overarching
question about any intangible assets

is recorded by the group, which

obviously there are relatively small,
immaterial,

intangible assets held in the likes of
Wealth Wizards.

and responsible uh in relation to
certain software purchase developments

that they've got they're obviously kind
of not really on the kind of group

materiality kind of scale can't talk to
those in much detail other than saying

they're pretty small fry um and then
separately there's obviously using

intangible assets at the alarm level in
relation to the ladin implementation

um which they

followed similar process to what we've
established for group for the think

beyond intangible asset right so all
those bits technically are part

of the scope of what you're kind of
talking to here but but realistically i

wasn't planning on talking to those per
se and maybe just more focusing on the

think beyond that so is that kind of
what you are looking for right yeah that

was our understanding as well i think at
the more granular level we i mean i i

wasn't involved in the the subsidiary
walkthroughs but i would have thought

have we'd have covered those there um
especially for the for the likes of all

and they'll go into more detail of those
on their audit so um yeah you you're on

the right landing in terms of what we're
looking for yeah okay so i suppose kind

of probably from a think beyond
perspective if i do my jibber jabber

might hopefully make sense but it's not
chronologically working um i guess the

actual intangible asset that we're
recording so the capitalization element

based on the the framework that was
established when we we started

capitalizing again in i'm going to say
2020 from the 2021 year end

I think.

Yes, you're right.

Thanks,

Elaine. So, yeah, so we stopped
capitalising for a short period after we

did an impairment of the asset in,

again, Elaine, you might pick out the
year, but was it 18 or 19? There was an

impairment. It was 19, the impairment.

i'm glad that i'm at least broadly close
so um so yeah so um so when when

we kind of restarted capitalization we
kind of established the the framework of

what cost we would capitalize and that
was done based on a review of the uh of

how those costs were being kind of
grouped together um uh and

fundamentally although there were a
couple of um

A couple of kind of captions for which
we were capitalizing, maybe percentages

of the total.

For the most part, it was capitalization
of design costs that were classified as

design, build and test, being the ones
that ultimately contribute to the, I

guess, the developed asset.

And so there was the accounting,
technical accounting review of those

categories and classifications.

in which would have probably been early
2022 as part of the year end 2021 kind

of finalization and subsequent to that
we have just applied that continue to

apply that model um to the cost
information

which Elaine provides to us so obviously
Elaine is um

looking at the the project and the
detail um the detailed kind of

costs that are flowing through the
project sub legend so she can kind of

that level of detail but ultimately as
those those costs get summarized to me

the level of is it design build test is
it something else each

month and but once a quarter i will take
those costs and

add them up and capitalize the design
build test is more or less as simple as

that earlier on in the process There
were effectively three work

streams to the capitalization process
because there were effectively

three kind of distinct kind of aspects.

There was the PPR, the core kind of PPIR
kind of product. There was a kind of a

separate kind of release 105, which is.

ultimately linked to the PPIR product
and then there's a completely separate

product in the the ISO product that the
ISO workstream that is continues to be

ongoing the first two we stopped
capitalization on when we

or the PPIR product we stopped
capitalization on in July

2023 might have got that year wrong but
that's somewhere around then basically

when the contract started for

our 10 -year maintenance contract with
Sonata.

So we kind of stopped capitalizing then.

The asset was effectively brought into
use initially at that point, and then

obviously subsequently.

um that was the non -advised drawdown
element but the product was brought to

and then there's been a full launch
since etc etc blah blah anyway we've

capitalizing that we also stopped
capitalizing the people the release 105

components shortly thereafter um but
that was a relatively kind of smaller

and as i say from from a 2025
perspective the only thing that we're

still capitalizing is the iso work
stream as that continues out through to

intended finalisation in Q3 2025.

So, short answer, Elaine gives us the
outputs from the detailed

granularity, what's summarised under the
categorisations that those costs have

been allocated to, and we're
capitalising those numbers.

That makes sense. So the quarterly
working that you do, that's in respect

that third asset, the ISA work stream?

Yeah, yeah.

OK, so once you undertake that working,
who do you pass that on to?

I pass it back to Elaine because she
will do the, she'll then kind of put

through the capitalisation back into the
project subledger. So then that will.

feed the general ledger with the
capitalization entry.

And the finance close team book the
monthly, quarterly, whatever

they do, the monetization. I'm not sure
whether they post it monthly or

quarterly. But yeah, they post that
directly for the first two elements,

are obviously in use.

So yeah, both of those are on the same
spreadsheet.

that's that's fine we might need to
request that that spreadsheet if that's

that's okay uh yeah yeah okay um and
then um sort of after

that is that when it's presented to the
gf talk committee or so i i

guess kind of there's no there's no
necessary um

kind of requirement for it to go to gf
talk right because it's just running a

process. So GF TARC, typically you'd be
talking about new transactions or new

judgments, right? So in terms of
capitalization, there isn't really a

requirement to go back to GF TARC.

What we have typically gone to GF TARC a
couple of times, you know, let's say

kind of probably once a year over the
last couple of years, that's largely

to say, look, here's an update on where
we are with capitalization.

Here's what we're expecting kind of
going forward.

Really, it's tied into kind of saying,
OK, we think that we should stop

capitalizing the 105 or we think we
should stop capitalizing PPI for these

reasons. So it's really that it's not so
much a GFR. Can you approve that we've

capitalized two million this quarter?

And as you can probably appreciate,
because we're only left with the ISA

stream. now it's probably not material
enough to kind of go to to say that much

to to gf talk um i think we simon you
can just tell me what i'm completely

here but um when we talk a little bit
about kind of impairment uh which

obviously is an ongoing judgment um we
did

include the amounts for capitalization
in that paper uh but it wasn't so much

from a

an approval perspective it was it was
more from a hey we're capitalizing i

it was yeah forecast six million or
something like that yeah exactly it was

saying this is what the balance sheet is
going to be and off the back of that

right now the the main paper is talking
about kind of um impairment indicators

exactly that's fine

and um i think in terms of the um sort
of amortization calculation

process um once those calculations are
done sort of who does that go to for

approval well uh when you say well

as i say i've prepared it's part of the
same spreadsheet right so and ultimately

there's no in terms of approval there'll
be a general preparing a general

approver in in the finance close team

kind of receive that information from us
but there's no real judgment in it

because um we're amortizing it until the
end of the snarter contract which is

july 20 2033 so it's simply this is
what's been capitalized on the balance

this is the remaining period until 2033
and so that amortization at the moment

is so this is 2 .7 million a quarter or
2 .7 million

Yeah, it must be a quarter, I think.

So obviously that figure is not changing
and it will only change when we stop

capitalising ISA and start to amortise
that.

Yeah,

that's fine.

And in terms of impairment, is that sort
of done biannually, if I'm correct?

The review process?

Yeah, I mean, it will align. I mean,
typically we're kind of saying that we

have. two windows for going to the audit
committee, you know, prior to half year

and prior to year end with accounting
judgments.

So we've kind of really aligned it with
that.

That really in terms of kind of saying,
OK, well, do we think that we need to do

a full impairment calculation or not?
Clearly, that's the starting point. Do

have any indicators?

And then.

Typically then, obviously, if there is
an indicator, then we would obviously

look to do, potentially look to do a
full calc or at least make sure we've

a full calc ahead of the year end if we
think that there's a chance that we need

to do it.

But yeah, bi -annually. So just say yes
to answer your question in five seconds.

Okay. And have there been any sort of
indicators relating to the ISO work

stream?

uh that's certainly not certainly not
the ice work stream no and and in

now either um so that's the latest paper
right that went to gf chart

i think we've got a pretty good part of
the other day didn't it yeah yeah so um

uh we need to i'll check after this call
whether we've uploaded those

latest approved papers to wherever we
normally upload them and clara but um

Obviously, that's our usual process.
We'd obviously kind of get those to you.

Yeah, yeah.

That's OK.

Becky, Marvel, do you have any other
questions?

Not for me, no. I think it's a fairly
simple process, isn't it?

Well,

simple from my perspective, I'm sure it
is.

Yeah, there's obviously judgments
involved, but the underlying process

pretty straightforward, right?

Yeah.

Yeah.

Nothing else from me at the minute.

Marvel, anything from yourself?

Nope.

Nope.

So I think on that basis, if we can just
sort of request those papers from you.

So we'll send a follow -up email
anyways, just requesting that, if that's

Yeah.

Yeah, that's very helpful. And I just
want to thank you for your time.

No worries. No worries at all.

All right. Thanks very much.

Thank you.

Bye. Bye.