HSBC 2004 Annual Report Download - page 344

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
342
2004 2003 2002
Number Number Number
(000’s) (000’ s) (000’ s)
Outstanding at 1 January ........................................................................ 43,153 36,172 29,049
Additions during the year ....................................................................... 18,813 20,974 21,292
Released in the year ............................................................................... (15,945) (13,993) (12,262)
Forfeited in the year ............................................................................... –– (1,907)
Outstanding at 31 December .................................................................. 46,021 43,153 36,172
The weighted average purchase price for shares purchased by HSBC for other awards under the Restricted Share
Plan in 2004 was US$16.43 (2003: US$11.39; 2002: US$12.04).
The weighted average remaining vesting period as at 31 December 2004 was 1.47 years (2003: 1.23 years; 2002:
1.41 years).
(d) Goodwill
Goodwill arises on the acquisition of subsidiary or associated undertakings when the cost of acquisition exceeds
the fair value of HSBC’ s share of separable net assets acquired.
Under UK GAAP, for acquisitions made on or after 1 January 1998, goodwill is included in the balance sheet in
‘Intangible assets’ in respect of subsidiary undertakings, in ‘Interests in associates’ in respect of associates and in
‘Interests in joint ventures’ in respect of joint ventures. Capitalised goodwill is amortised over its estimated life
on a straight-line basis. For acquisitions prior to 1 January 1998, goodwill was charged against reserves in the
year of acquisition.
Under US GAAP, goodwill on acquisitions made before 1 July 2001, including those made before 1 January
1998, would have been capitalised and amortised over its useful economic life. Goodwill on acquisitions made
after 1 July 2001 is capitalised but not amortised, and is subject to annual impairment testing. Goodwill on
acquisitions made before 1 July 2001 ceased to be amortised on 1 January 2002 and is subject to annual
impairment testing.
At 31 December 2004, the cost of goodwill arising on the acquisition of subsidiary undertakings on a US GAAP
basis was US$36,084 million (2003: US$33,581 million; 2002: US$23,613 million) and accumulated
amortisation of goodwill was US$4,385 million (2003: US$4,016 million; 2002: US$3,630 million).
The following table shows changes in the carrying value of goodwill arising on the acquisition of subsidiary
undertakings during the year:
Europe Hong Kong
Rest of
Asia-Pacific
North
America
South
America Total
US$m US$m US$m US$m US$m US$m
At 1 January 2004 ................................ 17,977 18 429 10,685 456 29,565
Additions ............................................. 246 14 – 412 6 678
Exchange and other movements ........... 1,081 43 (56) 345 43 1,456
At 31 December 2004 ......................... 19,304 75 373 11,442 505 31,699
At 1 January 2003 ................................ 14,901 18 380 4,552 132 19,983
Additions ............................................. 492 – 38 6,353 287 7,170
Exchange and other movements ........... 2,584 – 11 (220) 37 2,412
At 31 December 2003 .......................... 17,977 18 429 10,685 456 29,565
(e) Intangible assets
The following intangible assets were recognised under US GAAP: