EURAZEO_REGISTRATION_DOCUMENT_2017
4
CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
Impairment tests 6.4.2 On goodwill
FINTRAX
Perpetual growth rate
1.0%
1.5%
2.0%
Impairment tests are performed for each Group company across all CGUs. Exceptionally, when the goodwill of an investment is in the course of allocation (CPK, Iberchem and WorldStrides), impairment testing consists of a review of the consistency of the most recent business plan and the business plan underlying the investment case. The business plans of investments were prepared based on management’s best estimates of the impacts of the current economic environment. No impairment losses were recognized following these tests. On intangible assets with an indefinite life Intangible assets with an indefinite life primarily consist of trademarks and publishing and distribution rights. As these assets were obtained on a business combination, their recoverable amount was estimated using the same methodology as that applied to establish their fair value for the purpose of allocating the purchase price, i.e. the royalties method (royalty flows discounted to infinity; flows are calculated by applying a theoretical royalty rate to actual revenue). The useful life of these assets is considered indefinite as there is no foreseeable time limit on the generation of cash flows; the assets are not amortized and are subject to annual impairment testing. The majority of intangible assets with an indefinite life are tested at CGU level and not individually. Sensitivity of impairment tests 6.4.3 The sensitivity of impairment tests was tested with respect to changes in the two main assumptions: WACC and the perpetual growth rate. On goodwill The sum of test margins of the main subsidiaries (difference between the sum of recoverable amounts and the sum of accounting values of CGUs) subject to the sensitivity of assumptions are presented below:
(In millions of euros)
WACC
9.20% 9.70% 10.20%
82 39
114 67
149
97 52
2
25
NOVACAP
Perpetual growth rate
1.3%
1.8%
2.3%
(In millions of euros)
WACC
7.99% 8.49% 8.99%
357 282 216
431
518 416 330
344 269
SOMMET EDUCATION
Perpetual growth rate
1.0%
1.5%
2.0%
(In millions of euros)
WACC
7.08% 7.58% 8.08%
21
48 15
81 42 10
(7)
(32)
(13)
The sensitivity analysis presented reflects the aggregate CGUs of each investment and demonstrates that the recoverable amount of Eurazeo’s investments remains higher than the carrying amount. Nonetheless, in accordance with IAS 36, impairment is measured and recognized for each CGU. For each CGU, no reasonably likely change in assumption (i.e. within the sensitivity range presented) would lead to the recognition of impairment. In addition, identical perpetual growth rates are used for a given investment. Accordingly, a change in one of these factors could have an impact on Eurazeo’s financial statements (impairment) if the recoverable amount of one or several CGUs falls below the carrying amount, even if the sum of these recoverable amounts remains higher than the total carrying amount of the CGUs comprising each investment.
ASMODEE
Perpetual growth rate
1.0% 457 406 360
1.5% 494 439
2.0%
(In millions of euros)
WACC
10.27% 10.77%
537 476 421
11.27%
389
EURAZEO PME
Perpetual growth rate
1.4% 492 392 304
1.9% 583 470
2.4%
(In millions of euros)
WACC
8.58% 9.08% 9.58%
690 560 448
371
226
2017 Registration document
Eurazeo
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