Goodwill £m	Certification costs and participation fees £m	Development expenditure £m	Recoverable engine costs £m	Other £m	Total £m
1 External software purchases were previously included within property, plant and equipment. Following a review in 2006, it was concluded that certain of these items should more properly, in accordance with IAS 38 Intangible Assets, be classified as intangible assets. Accordingly, software with a net book value at December 31, 2005 of £34 million (January 1, 2005 £23 million) has been reclassified from property, plant and equipment to intangible assets. There is no change to the amortisation policy in respect of these assets, being on a straight-line basis over a maximum of five years.
							Cost:
At January 1, 2005 as previously reported	759	274	311	229	—	1,573
Reclassification of software from property, plant and equipment 1	—	—	—	—	28	28
At January 1, 2005 (restated)	759	274	311	229	28	1,601
Exchange adjustments	(8)	—	—	—	—	(8)
Additions	—	10	70	36	16	132
At January 1, 2006 (restated)	751	284	381	265	44	1,725
Exchange adjustments	(23)	—	—	—	—	(23)
Additions	—	91	41	64	29	225
Acquisition of business	7	—	—	—	3	10
Disposals	—	(1)	—	—	(6)	(7)
At December 31, 2006	735	374	422	329	70	1,930
Accumulated amortisation and impairment:
At January 1, 2005 as previously reported	—	129	103	114	—	346
Reclassification of software from property, plant and equipment 1	—	—	—	—	5	5
At January 1, 2005 (restated)	—	129	103	114	5	351
Provided during the year (charged to cost of sales)	—	9	13	32	5	59
At January 1, 2006 (restated)	—	138	116	146	10	410
Provided during the year (charged to cost of sales)	—	5	16	30	9	60
At December 31, 2006	—	143	132	176	19	470
Net book value at December 31, 2006	735	231	290	153	51	1,460
Net book value at December 31, 2005 (restated)	751	146	265	119	34	1,315
Net book value at January 1, 2005 (restated)	759	145	208	115	23	1,250
Net book value at January 1, 2005 as previously reported	759	145	208	115	—	1,227

Goodwill

In accordance with the requirements of IAS 36 Impairment of Assets, goodwill is allocated to the Group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination that gave rise to the goodwill as follows:

Cash-generating unit (CGU) or group of CGUs

	Primary reporting segment	2006 £m	2005 £m
Rolls-Royce Deutschland Ltd & Co KG	Civil aerospace	186	190
Commercial marine – arising from the acquisition of Vickers plc	Marine	470	482
Energy – arising from the acquisition of Cooper Energy Systems	Energy	55	61
Other	Various	24	18

Goodwill has been tested for impairment during 2006 on the following basis:

• The carrying value of goodwill has been assessed by reference to value in use. Values in use have been estimated using cash flows from the most recent forecasts prepared by management. Given the long-term nature of the business in which the Group operates, these typically forecast the next ten years. Growth rates for the period not covered by the forecasts are based on a range of growth rates that reflect the products, industries and countries in which the relevant CGU or group of CGUs operate.
• The key assumptions on which the cash flow projections for the most recent forecast are based are discount rates, growth rates and the impact of foreign exchange rates on the relationship between selling prices and costs.
• The pre-tax cash flow projections have been discounted at 12.75 per cent, based on the Group's weighted average cost of capital.