Pearson

Annual Report and Accounts 2010

Notes to the consolidated financial statements

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12. Investments in joint ventures and associates

Joint ventures

All figures in £ millions 2010 2009
At beginning of year 18 13
Share of (loss)/profit after tax (1) 4
Dividends (3) (3)
Loan repayment (3)
Additions and further investment 4 13
Transfer to subsidiary (6)
At end of year 18 18

Investments in joint ventures are accounted for using the equity method of accounting and are initially recognised at cost. The total goodwill recorded on acquisition of joint ventures at 31 December 2010 was £12m (2009: £11m).

The aggregate of the Group’s share of its joint ventures’ assets (including goodwill) and liabilities, none of which are individually significant, are as follows:

All figures in £ millions 2010 2009
Assets
Non-current assets 15 15
Current assets 14 11
Liabilities
Current liabilities (11) (8)
Net assets 18 18
Income 17 12
Expenses (18) (8)
(Loss)/profit after tax (1) 4

Associates

All figures in £ millions 2010 2009
At beginning of year 12 10
Exchange differences (1) 4
Share of profit after tax 42 26
Dividends (20) (19)
Additions 17 1
Reversal of distribution from associate in excess of carrying value (7) (7)
Actuarial gains/(losses) on retirement benefit obligations 1 (3)
Transfer from other financial assets 9
At end of year 53 12

Included in the share of profit after tax is a gain in fair values of £12m (2009: £nil) arising on a stepped acquisition by FTSE International Ltd.

In addition to the amounts disclosed above, FTSE paid royalties of £11m (2009: £10m) to the FT Group during the year.

Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The total goodwill recorded on acquisition of associates at 31 December 2010 was £21m (2009: £nil).

The Group’s interests in its principal associates, all of which are unlisted, are as follows:

2010 All figures in £ millions Country of incorporation % interest held Assets Liabilities Revenues Profit
The Economist Newspaper Ltd England 50 129 (129) 169 25
FTSE International Ltd England 50 62 (44) 45 17
Other 41 (6) 9
Total 232 (179) 223 42
2009 All figures in £ millions Country of incorporation % interest held Assets Liabilities Revenues Profit
The Economist Newspaper Ltd England 50 116 (116) 161 22
FTSE International Ltd England 50 28 (24) 38 4
Other 14 (6) 12
Total 158 (146) 211 26

The interests held in associates are equivalent to voting rights.