Econocom - 2020 annual report

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 net book value.

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. To reach a risk of impairment, the main assumptions should be as follows:

for the DSS CGU: a deterioration of • the business plan of more than 16% or a discount rate of more than 12.90%; for the TMF CGU: a deterioration of • the business plan of more than 13% or a discount rate of more than 13.30%.

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). •

2020

2019

Perpetual growth rate

Perpetual growth rate

Discount rate

Discount rate

8.50% 1.00% 8.50% 1.00% 8.50% 1.50% 8.50% 1.50%

Technology Management & Financing

Digital Services & Solutions

The growth rate and weighted average cost of share capital assumptions were reviewed in light of global market data. The growth rate reflects our best estimate given the current economicenvironment.

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.

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2020 annual report