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The licences $301.2 million (2011: $301.2 million) to operate hydro-electric power stations within the Merchant Energy CGU have been assessed as having indefinite lives. The factors considered in determining the useful lives of these licences are the long-term nature of the initial licences, the expectation that the licences will be renewed, the insignificant cost of renewal, and compliance with licensing obligations. 

## Impairment testing for Retail Energy and Merchant Energy 

The recoverable amounts for the Retail Energy and Merchant Energy CGUs have been determined using value in use models. The key assumptions in the calculation of value in use are customer numbers, energy procurement costs and regulatory outcomes. 

The estimate of regulatory outcomes is based on actual regulatory decisions for the current price reset period, which are publicly available, together with the consolidated entity’s expectations of regulatory decisions beyond the current reset period. Customer numbers are estimated based on historical experience in various segments, together with marketing strategies for the retention and winning of customers. Energy procurement costs are estimated based on the actual hedge portfolio, together with an estimate of future hedging prices and volumes beyond the period of the actual hedge portfolio. 

The recoverable amounts for the Retail Energy and Merchant Energy CGUs have been determined using value in use models, including an appropriate terminal value. Cash flow forecasts are based on Board approved budgets and the most recent three-year plan extrapolated out to 10 years using forecast CPI. The terminal value is based on final year free cash flow capitalised in perpetuity. Discount rates used are the pre-tax weighted average cost of capital of 13.4% (2011: 13.4%). 

No impairment loss has been recognised for the Retail Energy or the Merchant Energy CGUs for the year ended 30 June 2012 (2011: $nil). 

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For terms and conditions relating to loans to associates and jointly controlled entities, refer to Note 50. 

## Note 24 – Other assets (non-current) 

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