Nokia 2005 Annual Report Download - page 166

Notes to the Consolidated Financial Statements (Continued)
8. Other operating income and expenses (Continued)
Other operating income for 2003 includes a gain of EUR 56 million on the sale of the remaining
shares of Nokian Tyres Ltd. In 2003, Networks recorded a charge of EUR 80 million for personnel
expenses and other costs in connection with the restructuring taken in light of general downturn
in market conditions, of which EUR 15 million was paid during 2003.
9. Impairment
Common
Mobile Enterprise Group
2005 Phones Multimedia Solutions Networks Functions Group
EURm EURm EURm EURm EURm EURm
Impairment of available-for-sale
investments ................... — — — — 30 30
Total, net ....................... — — — — 30 30
2004
Impairment of available-for-sale
investments ................... — — — — 11 11
Impairment of capitalized
development costs .............. — — — 115 — 115
Total, net ....................... — — — 115 11 126
2003
Customer finance impairment
charges, net of reversals ......... — — — (226) — (226)
Impairment of goodwill ........... — — — 151 — 151
Impairment of available-for-sale
investments ................... — — — — 27 27
Impairment of capitalized
development costs .............. — — — 275 — 275
Total, net ....................... — — — 200 27 227
During 2004, the Group recorded an impairment charge of EUR 65 million of capitalized
development costs due to the abandonment of FlexiGateway and Horizontal Technology modules.
In addition, an impairment charge of EUR 50 million was recorded on WCDMA radio access
network program due to changes in market outlook. The impairment loss was determined as the
difference between the carrying amount of the asset and its recoverable amount. The recoverable
amount for WCDMA radio access network was derived from the discounted cash flow projections,
which cover the estimated life of the WCDMA radio access network current technology, using a
discount rate of 15%. The impaired technologies were part of Networks business group.
Relating to restructuring at Networks, the Group recorded a EUR 206 million impairment of
capitalized development costs in 2003 relating to the WCDMA 3G systems. In 2003, Nokia also
recorded a EUR 26 million and EUR 43 million impairment of capitalized development costs
relating to FlexiGateway and Metrosite systems, respectively. The impairment losses were
determined as the difference between the carrying amount of the asset and its recoverable
amount. In determining the recoverable amount, the Group calculated the present value of
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