Diageo is a major international company located in London. A recent annual report contained the following information concerning its accounting policies.

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Acquisitions On the acquisition of a business, including an interest in a related company, fair values are attributed to the group's share of net tangible assets and significant owned brands ac- quired. Where the cost of acquisition exceeds the values attributable to such net assets, the dif- ference is treated as goodwill and is written off directly to reserves in the year of acquisition. Intangible assets Significant owned brands, acquired after 1st January 1985, the value of which is not expected to diminish in the foreseeable future, are recorded in the balance sheet as fixed intangible assets. No amortisation is provided on these assets but their value is reviewed annu- ally by the directors and the cost written down as an exceptional item where permanent diminu- tion in value has occurred. Diageo used the word reserves to mean retained earnings. Discuss how this accounting treatment compares with procedures used in this country.