technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 4 GOODWILL, INTANGIBLE & TANGIBLE ASSETS

Goodwill, intangible & tangible assets

NOTE 4

Goodwill 4.1 Business combinations are accounted for using the acquisition method at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus • the recognized amount of any previously owned non-controlling • interests in the acquiree; plus if the business combination is achieved in stages, the fair value of • the pre-existing equity interest in the acquiree; less the net recognized amount (generally fair value) of the identifiable • assets acquired and liabilities assumed. Under option, for each business combination, any non-controlling interest in the acquiree is measured either at fair value (thus increasing the goodwill) or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Once

control is achieved, further acquisition of non-controlling interest or disposal of equity interest without losing control are accounted as equity transaction. Goodwill is recognized in the currency of the acquired subsidiary/associate and measured at cost less accumulated impairment losses and translated into euros at the rate effective at the end of the period. Goodwill is not amortized but is tested annually for impairment. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination, are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss, except if contingent consideration is classified in equity.

The following table provides the allocation of the significant amounts of goodwill to each Goodwill Reporting Unit (GRU) based on the organization effective as of December 31, 2018 (refer to note 4.4 for detail on impairment tests)

Entertainment Services

Production

Connected Home

Services DVD Services

Total

(in million euros)

At December 31, 2016

442 (33)

198 (15)

379 (42)

1,019

Exchange difference

(90)

Additions (1) Disposals

13

- - - -

- - - -

13

- - -

- - -

Impairment loss

Other

At December 31, 2017

422

183

337

942

6

Exchange difference

8

3

10

21

Additions Disposals

- - - -

- - - -

- -

- -

Impairment loss

(77)

(77)

Other

-

-

AT DECEMBER 31, 2018

430

186

270

886

Linked to Purchase price allocation of LG set-up box business acquisition (refer to note 2.3). (1)

195

TECHNICOLOR REGISTRATION DOCUMENT 2018