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	Goodwill £m	Certification costs and participation fees £m	Development expenditure £m	Recoverable engine costs £m	Software and other £m	Total £m
Cost:
At January 1, 2007	735	374	422	329	70	1,930
Exchange adjustments	59	1	—	—	—	60
Additions	—	129	91	37	39	296
On acquisitions of businesses	7	—	1	—	1	9
Disposals	—	—	—	—	(1)	(1)
At January 1, 2008	801	504	514	366	109	2,294
Exchange adjustments	173	9	5	—	7	194
Additions	—	55	113	97	128	393
On acquisitions of businesses	41	—	—	—	11	52
On disposals of businesses	(2)	—	—	—	—	(2)
Disposals	—	—	—	—	(1)	(1)
At December 31, 2008	1,013	568	632	463	254	2,930
Accumulated amortisation and impairment:
At January 1, 2007	—	143	132	176	19	470
Provided during the year1	—	7	18	28	10	63
At January 1, 2008	—	150	150	204	29	533
Exchange adjustments	—	3	—	—	2	5
Provided during the year1	5	12	26	46	18	107
Disposals	—	—	—	—	(1)	(1)
At December 31, 2008	5	165	176	250	48	644
Net book value at December 31, 2008	1,008	403	456	213	206	2,286
Net book value at December 31, 2007	801	354	364	162	80	1,761
Net book value at January 1, 2007	735	231	290	153	51	1,460

¹Charged to cost of sales except development costs, which are charged to research and development costs.

Goodwill

In accordance with the requirements of IAS 36 Impairment of Assets, goodwill is allocated to the Group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination that gave rise to the goodwill as follows:

Cash-generating unit (CGU) or group of CGUs.

	Primary reporting segment	2008 £m	2007 £m
Rolls-Royce Deutschland Ltd & Co KG	Civil aerospace	266	203
Commercial marine – arising from the acquisition of Vinters plc	Marine	599	514
Commercial marine – arising from the acquisition of Scandinavian Electric Holding AS	Marine	42	—
Energy – arising from the acquisition of Rolls-Royce Energy Systems Inc.	Energy	73	54
Other	Various	28	30
		1,008	801

Goodwill has been tested for impairment during 2008 on the following basis:

• The carrying value of goodwill has been assessed by reference to value in use. These have been estimated using cash flows from the most recent forecasts prepared by management, which are consistent with past experience and external sources of information on market conditions. Given the long-term and established nature of many of the Group’s products (product lives are often measured in decades), these typically forecast the next ten years. Growth rates for the period not covered by the forecasts are based on a range of growth rates that reflect the products, industries and countries in which the relevant CGU or group of CGUs operate.
• The key assumptions on which the cash flow projections for the most recent forecast are based are discount rates, growth rates and the impact of foreign exchange rates on the relationship between selling prices and costs.
• The pre-tax cash flow projections have been discounted at 12.75 per cent, based on the Group’s weighted average cost of capital.

The principal value in use assumptions for significant goodwill balances are:

• Rolls-Royce Deutschland Ltd & Co KG – volume of engine deliveries, flying hours of installed fleet and cost escalation, based on current and known future programmes, estimates of customers' fleet requirements and long-term economic forecasts. For the purposes of the impairment test only, cash flows beyond the ten-year forecasts are assumed to grow at 2.5 per cent. The directors do not consider that any reasonably possible change in the key assumptions would cause the value in use of the goodwill to fall below its carrying value. A doubling of the discount rate would not lead to an impairment of this balance.
• Vinters plc – volume of equipment deliveries, capture of aftermarket and cost escalation, based on current and known future programmes, estimates of customer’s fleet requirements and long-term economic forecasts. For the purposes of the impairment test only, cash flows beyond the ten-year forecasts are assumed to grow at 4 per cent. The directors do not consider that any reasonably possible change in the key assumptions would cause the value in use of the goodwill to fall below its carrying value. It would require a doubling of the discount rate to cause an impairment of this balance.