Deferred income t ax is pro vided on tempor ar y diferences arisin g on in v es tments in subsidiaries and associates, e x cept where the timin g of the re v er sal of the tempor ar y diference is controlled b y the Group and it is probable that the tempor ar y diference will not be re v er sed in the foresee - able future . Non-current assets held for sale and discontinued oper ations (IFRS 5) The Group applies I f RS 5 Non-current assets held for sale and discontinued oper ations, which sets out requirements for the classifcation, measurement and present ation of non-current assets held for sale and discontinued oper - ations. Accor din g to IFRS 5 a non-current asset classifed as held for sale or dis - posal group shall be measured at the lo w er of its carr yin g amount and fair v alue less cos t to sell, if the carr yin g amount will be reco v ered throug h a sales tr ansaction r ather than throug h its continuous use in the oper ations. M easurement is carried out in t w o s teps. Fir s t , all assets and liabilities are measured in accor dance with the rele v ant s t andar d. f or disposal groups a second s tep also in v olv es a re-measurement to the lo w er of the carr yin g amount and the fair v alue less cos t to sell. A re-measurement should be carried out at each balance sheet date subsequent to the initial recognition. No depreciation or amortization should be recogniz ed for these assets from the date of reclassifcation up until the disposal has been completed. A discontinued oper ation is a component of a group that represents a ma jor line of business or g eogr aphical area of oper ations. The net income (after t ax) relatin g to discontinued oper ations is included on a separ ate line , net income for the y ear , discontinued oper ations. The Group has treated the pre vious business se gment Cash h andlin g Ser vices as a discontinued oper - ation in its compar ativ es for the y ear 2008 (see note 38). St atement of cash fo w (IAS 7) The s t atement of cash fo w has been prepared in accor dance with the indirect method. Liquid funds include short -term in v es tments with a maxi - mum dur ation of 90 da ys that are readily con v ertible to a kno wn amount of cash and subject to an insignifcant risk of chan g e in v alue . Liquid funds also include cash and bank deposits. G oodwill and other acquisition related int an g ible assets (IFRS 3, IAS 36 and IAS 38) G oodwill represents the e x cess of the cos t of an acquisition o v er the fair v alue of the Group ’ s share of the identifable net assets of the acquired subsidiar y / oper ations at the date of acquisition. G oodwill is tes ted annually for impairment and carried at cos t less accumulated impairment losses. Gains and losses on the disposal of an entit y include the carr yin g amount of g oodwill relatin g to the entit y or oper ations sold. Other acquisition related int an g ible assets arisin g from acquisitions can include v arious t ypes of int an g ible assets such as mark etin g -related, cus tomer -related, contr act -related, br and-related and technology -based. Other acquisition related int an g ible assets normally ha v e a defnite useful life . These assets are recogniz ed at fair v alue on the date of acquisition and subsequently carried at cos t less accumulated amortization and an y accu - mulated impairment losses. Amortization is calculated usin g the linear method to allocate the cos t of assets o v er their es timated useful liv es. Securit as ’ acquisition related int an g ible assets mainly relate to cus tomer contr act portfolios and the related cus tomer relationships. The v aluation of the cus tomer contr act portfolios and the related cus tomer relationships is based on the Multiple Ex cess Earnin g s M ethod (MEEM) which is a v aluation model based on discounted cash fo ws. The v aluation is based on the churn r ates and proft abilit y of the acquired portfolio at the time of the acquisition. I n t h e m o d e l a s p e c i f c char g e – a contributor y asset char g e – is applied as a c o s t o r r e t u r n r e q u i r e m e n t for the assets supportin g the int an g ible asset . Cash fo ws are discounted usin g the W eig hted A v er a g e Cos t of Capit al (W A C C) adjus ted for local interes t r ate le v els in the countries of acquisition. The useful life of cus tomer contr act portfolios and the related cus tomer relationships are based on the churn r ate of the acquired portfolio and are normally bet w een 3 and 20 y ear s correspondin g to a y early amortization of bet w een 5 percent and 33.3 percent . Br and-related int an g ible assets are calculated usin g the relief of ro y alt y method. The useful life of these br ands is normally up to 10 y ear s correspondin g to a y early amortization of up to 10 percent . A deferred t ax liabilit y is calculated at the local t ax r ate on the diference bet w een the book v alue and t ax v alue of the int an g ible asset . The deferred t ax liabilit y is re v er sed o v er the same period as the int an g ible asset is amortiz ed, which means that it neutr aliz es the impact of the amortization of the int an - g ible asset on the full t ax r ate percent a g e on the income after t ax. The initial recognition of this deferred t ax liabilit y increases the amount of g oodwill. G oodwill and other acquisition related int an g ible assets are allocated to cash- g ener atin g units (C GU) per countr y in a se gment . This allocation is also the basis for the y early impairment tes tin g. Amortization and impairment of acquisition related int an g ible assets are sho wn on the line amortization and impairment of acquisition related int an - g ible assets in the s t atement of income . Acquisition related res tructurin g and inte gr ation cos ts Acquisition related res tructurin g cos t are cos ts relatin g to the res tructurin g and / or inte gr ation of acquired oper ations into the Group . R es tructurin g cos ts are cos ts that are recogniz ed based on the specifc criteria for res truc - turin g pro visions in IAS 37 (see further under the section Pro visions belo w). R es tructurin g cos ts can co v er se v er al activities that are necessar y to prepare acquired oper ations for inte gr ation into the Group such as redundanc y pa yments, pro visions for rented premises that will not be utiliz ed or sublet belo w cos t or other non-cancellable leasin g contr acts that will not be utiliz ed. Inte gr ation cos ts normally co v er activities that do not qualif y to be recog - niz ed as pro visions. Such activities could be re-br andin g (chan g in g log o - t ypes on buildin g s, v ehicles, uniforms, etc .) but could also co v er per sonnel cos ts for e xample tr ainin g, recruitment , relocation and tr a v el, cert ain cus tomer related cos ts and other increment al cos ts to tr ansform the acquired oper ation into the acquirer s format . Classif yin g e xpenses as cos ts relatin g to inte gr ation of acquired oper ations mus t also fulfll the criteria belo w : · The cos t w ould not ha v e been incurred if the acquisition not had t ak en place · The cos t relate to a project identifed and controlled b y mana g ement as part of a inte gr ation progr am set up at the time of acquisition or as a direct consequence of an immediate pos t -acquisition re view . Items afectin g compar abilit y This item includes e v ents and tr ansactions with signifcant efects, which are rele v ant for under s t andin g the fnancial per formance when comparin g income for the current period with pre vious periods. The y include: · Capit al gains and losses arisin g from the disposal of material cash g ener atin g units · m aterial impairment losses and bad debt losses · m aterial litigations and insur ance claims · Other material income and e xpense items of a non-recurrin g nature , such as the res tructurin g cos ts for the cos t sa vin g s progr am carried out at the end of 2012 Pro visions, impairment losses, bad debt losses or other material non-recurrin g items that are classifed as items afectin g compar abilit y in a period are accounted for consis tently in future periods b y treatin g an y re v er sal of pro visions, impairment losses, bad debt losses or other non-recurrin g items as items afectin g compar abilit y . R efer to note 11 for further information re gar din g items afectin g compa - r abilit y . 78 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012