Econocom - 2020 annual report

06 consolidated financial statements

notes to the consolidated financial statements

Technology Management & Financing

Digital Services & Solutions

Total

in € millions

2019 Goodwill at 31 December 2018

114.6 (0.8)

516.5 (85.9)

631.1

(86.7)

Reclassification to assets held for sale

- - - -

-

-

Acquisitions

(31.5)

(31.5)

Disposals

- -

- -

Foreign currency translation adjustments

Impairment

Goodwill at 31 December 2019

113.8 113.8

399.1 403.1 (4.0)

512.9 516.9 (4.0)

of which gross amount

-

of which accumulated impairment

In 2019, goodwill from companies disposed of concerned Jade and Rayonnance.

Impairment tests and impairment of goodwill 9.3. Impairment testing involves determining whether the recoverable amount of an asset, CGU or group of CGUs is lower than its net book value.

Fair value is the amount that could be obtained from the sale of the tested assets in an arm’s length transaction between knowledgeable, willing parties, after deducting the estimated costs of disposal. These amounts are calculated based on market information. When the recoverable value of the assets of a CGU or group of CGUs is lower than its net book value, an impairment loss is recognised. Impairment losses are recorded first as a reduction of the book value of goodwill allocated to a CGU and then charged against the assets of the CGU, pro rata to the book value of each of the components of the CGU. Impairment losses are recorded under “Non-recurring operating income and expenses” in the income statement.

The recoverable amount is the higher of fair value less the costs of disposal and value in use. Value in use is determined based on estimated future cash flows and a terminal value, taking into account the time value of money and the risks associated with the business and the specific environment in which the CGU or group of CGUs operates. Cash flow projections are based on the budgets and on business plans covering a period of no more than five years. The terminal value is calculated by discounting normalised annual cash flows to perpetuity.

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2020 annual report