Econocom - 2019 Universal registration document

06 consolidated financial statements

notes to the consolidated financial statements

Impairment losses recognised for property, plant and equipment and intangible assets other than goodwill may be reversed in subsequent periods if the asset’s recoverable amount becomes greater than its carrying amount.

Impairment losses recognised for goodwill may not be reversed. When a relevant CGU is disposed of, the resulting goodwill is taken into account for the determination of the net proceeds of the disposal.

Results of impairment tests Based on the impairment tests conducted, goodwill does not need to be impaired. Key assumptions The value in use of the Group’s CGUs is sensitive to the following assumptions: discount rate applied to future cash flows; • growth rate of cash flows beyond the forecast period; • business plan (revenue and margin). •

2019

2018

ڳ

Discount rate Perpetuity growth rate Discount rate Perpetuity growth rate

Technology Management & Financing

8.50% 1.00%

8.00%

1.00%

1.50%* 1.00% *

8.50% 1.50%

8.00%

Digital Services & Solutions

In 2018, perpetuity growth rates were 1.50% for Services activity and 1.00% for Products & Solutions. *

The growth rate and weighted average cost of capital assumptions were reviewed in light of global market data. The after-tax discount rate used corresponds to the weighted average cost of capital (“WACC”). The perpetuity growth rate applied by the Group does not exceed the growth rate for the industry. Applying a pre-tax discount rate to pre-tax cash flows would have resulted in a similar value for the CGUs.

The business plan was determined based on the expected growth of markets for the CGU concerned, taking account of growth levers identified by Management. Margins are determined based on the historical margins observed in the ژ years preceding the start of the budget period. These margins also take account of expected efficiency gains as well as events known to management and that could impact the profitability of the activity.

193

2019 annual report