This excerpt taken from the BP 6-K filed Mar 13, 2006.
Business combinations and goodwill - concluded
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combinations synergies. For this purpose, cash-generating units are set at one level below a business segment. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognized.
Goodwill arising on business combinations prior to January 1, 2003 is stated at the previous UK GAAP carrying amount.
Goodwill may also arise upon investments in jointly controlled entities and associates, being the surplus of the cost of investment over the Groups share of the net fair value of the identifiable assets. Such goodwill is recorded within investments in jointly controlled entities and associates, and any impairment of the goodwill is included within the income from jointly controlled entities and associates.