Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2017 are as follows:



	At January 1, 2017								At June 30, 2017
	Gross goodwill amount	Accumulated impairment		Net goodwill amount	Goodwill on acquisition	Impairment	Foreign currency translation adjustment		Gross goodwill amount	Accumulated impairment		Net goodwill amount
	$'000	$'000		$'000	$'000	$'000	$'000		$'000	$'000		$'000

Owned hotels:
Europe	64,459	(14,202	)	50,257	—	—	3,791		68,250	(14,202	)	54,048
North America	66,101	(16,110	)	49,991	5,500	—	—		71,601	(16,110	)	55,491
Rest of world	20,581	(13,149	)	7,432	—	—	(52	)	20,529	(13,149	)	7,380
Owned trains and cruises	6,325	(662	)	5,663	—	—	441		6,766	(662	)	6,104

Total	157,466	(44,123	)	113,343	5,500	—	4,180		167,146	(44,123	)	123,023

In the six months ended June 30, 2017, goodwill of $5,500,000 was recognized on the acquisition of Cap Juluca. See Note 3.

In the three months ended June 30, 2017, Belmond considered whether increased competition and the fall in tourist arrivals in Myanmar indicated that it was more likely than not that the fair value of Belmond Governor’s Residence was less than its carrying value. While Belmond concluded that there was no impairment trigger in the current quarter, it is carefully monitoring the situation. The impairment test remains sensitive to changes in assumptions; factors that could reasonably be expected to potentially have an adverse effect on the fair value of the reporting unit include the future operating projections of the hotel, volatility in debt or equity markets that could result in changes to the discount rate, political instability, changes in future travel patterns or local competitive supply. Any failure to meet these assumptions may result in a future impairment of goodwill.