The company recognises identifiable assets and liabilities acquired at their fair values at the acquisition date. Where the fair value of the identifiable net assets acquired exceeds the consideration transferred, the resulting excess is recognised as negative goodwill.

Negative goodwill is presented separately on the face of the balance sheet within fixed assets and is subsequently released to the profit and loss account in accordance with the following policy:

To the extent that the negative goodwill relates to expected future losses and expenses, it is recognised in the profit and loss account in the periods in which those losses and expenses are recognised.

Any remaining negative goodwill is recognised in the profit and loss account over the remaining useful economic lives of the non-monetary assets acquired, on a systematic basis.

Application to fixtures, fittings and equipment:

Where negative goodwill arises on the acquisition of fixtures, fittings and equipment used in hotel operations, the balance is released to the profit and loss account on a systematic basis over the useful economic lives of the related assets, consistent with the depreciation policies applied to those assets.

This results in the release of negative goodwill being matched against the depreciation charge of the underlying assets.

Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial period and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements.

Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.