Notes to the Financial Statements continued for the year ended 31 May 2022
12 Goodwill and intangible assets continued Pre-tax discount rates
Discount rates can change relatively quickly for reasons both inside and outside of management’s control. Those outside management’s direct control or influence include changes in the Group’s Beta, changes in risk free rates of return and changes in Equity Risk Premia. The discount rates are determined using a capital asset pricing model and reflect current market interest rates, relevant equity and size risk premiums and the risks specific to the CGU concerned. On this basis, specific discount rates are used for each CGU in the VIU calculation, and the rates reflect management’s assessment on the level of relative risk in each respective CGU. The table below summarises the pre-tax discount rates used for each CGU:
Pre-tax discount rate (%) 2022
Pre-tax discount rate (%) 2021
13.5 14.4 12.5 13.5 14.4 n/a
UK Software Resilience
12.9 15.3 13.6 13.0 14.2 13.7
North America Software Resilience
Europe Software Resilience UK and APAC Assurance North America Assurance
Europe Assurance
Sensitivity analysis Sensitivity analysis has been performed in respect of certain scenarios where management considers a reasonably possible change in key assumptions could occur. The outcome of applying sensitivity analysis in respect of the above inputs indicated that there is no reasonably possible scenario in which the carrying value of goodwill would be considered impaired.
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NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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