Our Future Note 6: Research and Development The Group conducts research and development activities to support future development of products to serve our patient communities, to enhance our existing products and to develop new therapies. All costs associated with our research and development activities are expensed as incurred as uncertainty exists up until the point of regulatory approval as to whether a research and development project will be successful. Development costs incurred after regulatory approval are expensed unless it meets the criteria to be recognised as an intangible asset. For the year ended 30 June 2024, research and development costs recognised in the statement of comprehensive income were $1,430m (2023: $1,269m). Note 7: Intangible Assets Goodwill Intellectual property and other intangible assets Software Intangible work in progress Total US$m US$m US$m US$m US$m Year 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Cost 8,079 8,079 8,465 8,379 924 833 120 193 17,588 17,484 Accumulated amortisation — — (650) (558) (592) (480) — — (1,242) (1,038) Net carrying amount 8,079 8,079 7,815 7,821 332 353 120 193 16,346 16,446 Net carrying amount at the beginning of the year 8,079 1,187 7,821 943 353 388 193 120 16,446 2,638 Additions — — 298 452 10 15 10 76 318 543 Acquisition of CSL Vifor — 6,892 — 6,660 — 32 — 14 — 13,598 Transfers — — — — 83 19 (82) (19) 1 — Disposals — — — — (4) — — — (4) — Amortisation for the year — — (301) (235) (109) (106) — — (410) (341) Transferred to assets held for sale (Note 15) — — (6) — — — — — (6) — Currency translation differences — — 3 1 (1) 5 (1) 2 1 8 Net carrying amount at the end of the year 8,079 8,079 7,815 7,821 332 353 120 193 16,346 16,446 Goodwill Any excess of the fair value of the purchase consideration of an acquired business over the fair value of the identifiable net assets is recorded as goodwill. Goodwill is initially allocated to a group of cash-generating units but is monitored at the segment (business unit) level. Goodwill is not amortised but is measured at cost less any accumulated impairment losses. Impairment occurs when a business unit’s recoverable amount falls below the carrying value of its net assets. The results of the impairment testing show that each business unit’s recoverable amount exceeds the carrying value of its net assets, inclusive of goodwill. Consequently, there is no goodwill impairment as at 30 June 2024 (2023: Nil). A change in assumptions significant enough to lead to impairment is not considered a reasonable possibility. The aggregate carrying amounts of goodwill by segment are as follows: 2024 2023 US$m US$m CSL Behring 5,468 5,468 CSL Seqirus 911 911 CSL Vifor 1,700 1,700 Closing balance of goodwill as at 30 June 8,079 8,079 Intellectual property Intellectual property (IP) acquired in a business combination is initially measured at fair value. Intellectual property internally developed or acquired separately is initially measured at cost. Following initial recognition, it is carried at cost less any accumulated amortisation and impairment. Amortisation is calculated on a unit-of-production or straight-line basis over periods generally ranging from 5 to 30 years, except where it is considered that the useful economic life is indefinite. 122 Notes to the Financial Statements Limited Annual Report 2023/24
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