4 Critical accounting judgements and estimation uncertainty Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstance. Provisions Provision is made for impairment of fixed assets, dilapidations and contingencies. These provisions require management’s best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require management’s judgement. The adequacy of provisions is reviewed monthly. Judgements on business combinations (note 31) The fair value of tangible and intangible assets acquired on the acquisition of Whistl Fulfilment Limited (formerly Prism-DM Holdings Limited) involved the use of valuation techniques and the estimation of future cashflows to be generated over a number of years. The estimation of fair values requires the combination of assumptions including revenue growth, sales mix and volumes and customer attrition rates. In addition, the use of discount rates requires judgement. Goodwill The Group considers whether intangible assets and/or goodwill are impaired. Where an indication of impairment is identified the estimation of recoverable values is required. This requires estimation of the future cashflows and also selection of appropriate discount rates in order to calculate the net present value of those cashflows. Impairment of trade debtors The Group makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 16 for the net carrying amount of the debtors and the associated impairment provision. 5 Turnover The Group’s turnover and profit taxation are derived from the provision of delivery services within the UK. The turnover and profit before tax are attributable to the principal activity of the company. An analysis of turnover is given below:
2017 £’000
2016 £’000
538,546 58,402
Mail and Parcels (letters of various sizes and parcels)
528,449 63,264
Doordrop Media
6,036
Fulfilment
-
602,984
591,713
Financials | Whistl Annual Report 2017
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