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This excerpt taken from the ELN 6-K filed Aug 28, 2009. a
Goodwill and other intangible assets
The carrying value of goodwill is lower under IFRS than under
U.S. GAAP, while conversely the carrying value of our other
intangible assets is higher under IFRS than under
U.S. GAAP, because of differences in our historical Irish
generally accepted accounting principles (Irish GAAP) accounting
for business combinations which have carried into our IFRS
financial statements as part of the transitional arrangements.
The higher carrying value for intangible assets other than
goodwill gives rise to a higher amortisation charge under IFRS
than under U.S. GAAP. Additionally, higher carrying values
under IFRS could result in higher intangible impairment charges
if
Table of Contents
the fair value of the related intangibles declines
post-acquisition. Goodwill is not amortised under either IFRS or
U.S. GAAP, but instead is subject to regular (at least
annual) impairment testing.
The principal reason for a higher carrying value of intangibles
other than goodwill under IFRS is that under U.S. GAAP, the
fair value of acquired IPR&D is expensed upon acquisition,
whereas under Irish GAAP and IFRS, these amounts are capitalised
as acquired IPR&D.
In addition, a number of differences arose in the manner in
which goodwill was previously written off when businesses were
sold under Irish GAAP and U.S. GAAP, which caused the net
carrying value of goodwill to be lower under IFRS than
U.S. GAAP at 30 June 2009 and 31 December 2008.
Under Irish GAAP, the goodwill arising from acquisition was
written off on disposal, whereas under U.S. GAAP, the
goodwill write-off on disposal was calculated proportionately
based on the relative fair value of the disposed business to the
total fair value of the reporting unit. Furthermore, under Irish
GAAP, goodwill was amortised, while goodwill amortisation was
not required under U.S. GAAP. As we did not restate our
historical business combinations in accordance with IFRS 3,
“Business Combinations,” as permitted by IFRS
1, “First-time Adoption of International Financial
Reporting Standards,” these differences remain in
effect between U.S. GAAP and IFRS.
This excerpt taken from the ELN 6-K filed Mar 30, 2009. a Goodwill
and other intangible assets
The carrying value of goodwill is lower under IFRS than under
U.S. GAAP, while conversely the carrying value of our other
intangible assets is higher under IFRS than under
U.S. GAAP, because of differences in our historical Irish
generally accepted accounting principles (Irish GAAP) accounting
for business combinations which have carried into our IFRS
financial statements as part of the transitional arrangements.
The higher carrying value for intangible assets other than
goodwill gives rise to a higher amortisation charge under IFRS
than under U.S. GAAP. Additionally, higher carrying values
under IFRS could result in higher intangible impairment charges
if the fair value of the related intangibles declines
post-acquisition, which was evidenced in the impairment of the
intangible assets related to Maxipime, Azactam and
Prialt in
Table of Contents
2007. Goodwill is not amortised under either IFRS or
U.S. GAAP, but instead is subject to regular (at least
annual) impairment testing.
The principal reason for a higher carrying value of intangible
assets other than goodwill under IFRS is that under
U.S. GAAP, the fair value of acquired IPR&D is
expensed upon acquisition, whereas under Irish GAAP and IFRS,
these amounts are capitalised as intangible assets.
In addition, under U.S. GAAP, our acquisition of Dura was
accounted for under the pooling-of-interests method, whereas
under Irish GAAP, now IFRS, this transaction was accounted for
using the purchase method. As a result, under U.S. GAAP,
the assets and liabilities of Dura were recorded at their
historical carrying amounts and no goodwill arose from the
merger of Dura and Elan, whereas under IFRS the assets and
liabilities of Dura were recorded based on their fair values at
the date of acquisition, and the excess of the purchase price
over the fair value of assets acquired was allocated to goodwill.
Also, a number of differences arose in the manner in which
goodwill was previously written off when businesses were sold
under Irish GAAP and U.S. GAAP, which caused the net
carrying value of goodwill to be lower under IFRS than
U.S. GAAP at 31 December 2008 and 2007. Under Irish
GAAP, the goodwill arising from acquisition was written off on
disposal, whereas under U.S. GAAP, the goodwill write-off
on disposal was calculated proportionately based on the relative
fair value of the disposed business to the total fair value of
the reporting unit. Furthermore, under Irish GAAP, goodwill was
amortised, while goodwill amortisation was not required under
U.S. GAAP. As we did not restate our historical business
combinations in accordance with IFRS 3, “Business
Combinations”, as permitted by IFRS 1,
“First-time Adoption of International Financial
Reporting Standards”, these differences remain in
effect between U.S. GAAP and IFRS.
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