Goodwill acquired through business combinations is allocated for impairment testing purposes to CGUs which reflect how it is monitored for internal management purposes, namely the various segments of the group. The carrying amount of goodwill was subject to an annual impairment test using either the fair value less costs to sell method or the discounted cash flow basis. The recoverable amount was determined by using the higher of the fair value less costs to sell and the discounted cash flow for each CGU.

Fair value less costs to sell method
The calculations used projected annualised earnings based on actual operating results. A price earnings multiple was applied to obtain the recoverable amount for each business unit. The earnings yields are considered to be consistent with similar companies within the industry and geographic segments. An average price earnings multiple of 12,7 (2015: 12,8) was used in the valuation of Foodservice Europe, 12,9 (2015: 12,8) for Foodservice United Kingdom, 13,0 (2015: 13,0) for Foodservice Australasia, and 14,1 (2015: 11,6) for Foodservice Emerging Markets.

Discounted cash flow method
The table below illustrates the weighted average cost of capital (WACC), cash flow growth, and terminal growth rates that were used in the discounted cash flow valuations for each of the CGUs.

The valuations resulted in significant surpluses over carrying values of the CGUs and thus the directors believe that a reasonably possible change in these multiples would not result in an impairment of the carrying value of goodwill. The valuation method is consistent with that used in the prior years and is considered a level 3 type valuation in accordance with IFRS 13 Fair Value Measurement.

No impairment was identified for the current financial year (2015: nil).