FAIRFAX MEDIA  LIMITED  2013  83 NOTEs TO THE FINANCIAL sTATEMENTs  14. INTANGIBLE AssETs (CONTINUED) (i)  iMPAiRMenT oF CASH GeneRATinG uniTS (CGu) inCludinG GoodWill And indeFiniTe liFe ASSeTS year 1 cash flows year 2 and 3 cash flows Terminal growth factor FAIRFAx MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 30 JUNE 2013 The carrying value of intangibles should be considered with reference to accounting policies described in Note 1(D) and (E).  The carrying value of intangible assets is an area of significant accounting estimate and judgement as described in Note 1(X)  of the Group’s accounting policies. The assumptions used in this estimation of recoverable amount and the sensitivities around  the key assumptions are outlined in (i)-(ii) below. A CGU is the grouping of assets at the lowest level for which there are separately identifiable cash flows. CGU Groups are an  aggregation of CGUs which have similar characteristics. The recoverable amount of each CGU which includes goodwill or  indefinite life intangibles has been tested. The value in use calculations prepared by the company use discounted cash flow methodology. Key components of the  calculation and the basis for each component are set out below: This is based upon the annual budget for 2014 which includes the impact of the Fairfax of the Future program. These cash flows are forecast using year 1 as a base and a growth or decline factor applied to revenue and expenses in years  2 and 3. The rate of change takes account of management’s best estimate of the likely results in these periods, industry  forecasts, historical actual rates and the impact of the Fairfax of the Future restructure. Revenue declines of between 3% and  8.5% have been used in publishing where management expect the cyclical downturn and structural change to continue.  In the digital businesses, revenue growth of 5% to 25% depending on the maturity of the market, has been adopted including  the introduction of digital subscription models. Expenses have been adjusted to account for the revenue growth or decline,  Fairfax of the Future restructuring and other committed management initiatives. A terminal growth factor that estimates the long term average growth for that CGU is applied to the year 3 cash flows into  perpetuity. A rate of 3.5% (2012: 3.5%) has been used for digital cash flows. Metropolitan Media, Australian Regional Media,  New Zealand Media and Printing Operations were calculated at nil growth (2012: Regional/New Zealand 2.5%; Metropolitan/ Printing nil) and Broadcasting calculated at 2.5% (2012: 2.5%). NOTE  MASTHEADS &  TRADENAMES  $’000  GOODWILL  $’000 RADIO  LICENCES $’000  SOFTWARE  $’000  CUSTOMER  RELATIONSHIPS  $’000  TOTAL $’000 At 24 June 2012 Cost  3,692,719   2,455,250   143,700   269,976   15,417   6,577,062  Accumulated amortisation and impairment  (2,405,876)  (1,446,165)  (22,063)  (193,970)  (6,943)  (4,075,017) net carrying amount  1,286,843   1,009,085   121,637   76,006   8,474   2,502,045  Period ended 30 June 2013 Balance at beginning of the financial year  1,286,843   1,009,085   121,637   76,006   8,474   2,502,045  Additions  –   –   –   7,954   –   7,954  Capitalisations from works in progress 15  –   –   –   9,364   –   9,364  Disposals  –   –   –   (286)  –   (286) Discontinued operations  (26,199)  (585,939)  –   (8,814)  –   (620,952) Disposal of controlled entities  (26,196)  (23,143)  –   (96) –  (49,435) Acquisition through business combinations  1,766   13,872   –   2,154   375   18,167  Amortisation for continuing operations 3(B)  (31)  –   –   (29,485)  (2,107)  (31,623) Amortisation for discontinued operations  –   –   –   (2,010)  –   (2,010) Impairment  (280,100)  (130,706)  (7,600)  –   (249)  (418,655) Exchange differences  10,140   11,216   –   2,053   56   23,465  At 30 June 2013, net of accumulated  amortisation and impairment  966,223   294,385   114,037   56,840   6,549   1,438,034  At 30 June 2013 Cost  3,707,070   1,809,157   143,700   276,874   15,921   5,952,722  Accumulated amortisation and impairment  (2,740,847)  (1,514,772)  (29,663)  (220,034)  (9,372)  (4,514,688) net carrying amount  966,223   294,385   114,037   56,840   6,549   1,438,034 