Intellectual property assets comprise fixed term licence investments. These are initially recognised at cost and amortised to the profit and loss account on a straight line basis over the licence term.
At each reporting date, the carrying value of each licence is reviewed and remeasured to its fair value, determined as the present value of expected future cash flows deriving from the investment. Any difference between the amortised cost and the updated fair value is recognised in the profit and loss account in the period in which it arises.
If the fair value falls below the amortised carrying value, an impairment is recognised in the profit and loss account in the period in which it arises.