Notes to the Accounts

24. Reserves

	Share   premium  account	Revaluation  reserve	Other  reserves	Profit and   loss account	Total
Summary of movements At 31 December 1997	158	3	1	(154)	8
Exchange differences	–	–	–	(8)	(8)
Premium on issue of 33m equity shares	340	–	–	(1)	339
Goodwill arising (see note 25)	–	–	–	(16)	(16)
Goodwill written back (see note 26)	–	–	–	262	262
Realisation of revaluation reserve	–	(2)	–	2	–
Profit retained for the year	–	–	–	311	311
At 31 December 1998	498	1	1	396	896
Analysed as: Partnerships and other associates	–	–	1	2	3
Group excluding partnerships and other associates	498	1	–	394	893

NOTE: Cumulative goodwill relating to acquisitions made prior to 1998, which was deducted from reserves, amounts to £1,912m (1997: £2,162m). Had the Group continued to apply its previous policy in respect of goodwill, an additional £2,348m would have been included in the goodwill reserve, which would have then shown a balance of £4,254m. Retained profit for the year would have been £323m reflecting the lack of amortisation of goodwill in respect of subsidiaries. The Group’s balance sheet would have shown net liabilities of £1,246m at 31 December 1998.  During 1998 Pearson plc received £17m on the issue of shares in respect of the exercise of options awarded under various share option plans. Employees paid £16m to the Group for the issue of these shares and the balance of £1m comprised contributions to the qualifying employee share ownership trust (QUEST) from subsidiary undertakings.