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2009/10 Annual Report Lenovo Group Limited
115115
17 Intangible assets (continued)
Impairment tests for goodwill and intangible assets with indefinite useful lives (continued)
The estimated growth rates used for value-in-use calculations in 2010 are as follows:
Japan,
Australia,
Latin North West New
China HARIE America America Europe Zealand
Growth rate 13.9% 9.7% 2.3% 4.3% 0.2% (3.2%)
The estimated growth rates used for value-in-use calculations in 2009 are as follows:
Asia Pacific
Europe, (excluding
Middle East Greater Greater
Americas and Africa China) China
Growth rate 1.6% 2.8% 1.4% 9%
Future cash flows are discounted at the standard rate of 11% (2009: 11%) across all CGUs.
Management determined budgeted gross margins based on past performance and its expectations for the market
development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The
discount rates are pre-tax and reflect specific risks relating to the relevant segments.
The directors are of the view that there was no evidence of impairment of goodwill and trademarks and trade names as at
March 31, 2010 arising from the review (2009: Nil).
If the discount rate had been one percentage point higher than management’s estimates (from 11% to 12%), the Group
would have recognized an impairment against goodwill of US$8 million. If the growth rates had been one percentage point
lower than management’s estimates, the Group would have recognized an impairment against goodwill of US$3 million.
If the forecasted operating margins had been one-fifth percentage point lower than management’s estimates, the Group
would have recognized an impairment against goodwill of US$15 million.
18 Subsidiaries
(a) Investments in subsidiaries
Company
2010 2009
US$’000 US$’000
Unlisted investments, at cost 1,898,912 1,860,176
A summary of the principal subsidiaries of the Company is set out in Note 38.
(b) Amounts due from/(to) subsidiaries
The amounts are interest-free, unsecured and have no fixed terms of repayment.
The carrying amounts of amounts due from subsidiaries approximate their fair value which are also the maximum
exposure to credit risk at the balance sheet date.