Nokia 2006 Annual Report Download - page 165

Notes to the Consolidated Financial Statements (Continued)
7. Other operating income and expenses (Continued)
real estate. In 2005, Enterprise Solutions recorded a charge of EUR 29 million for personnel expenses
and other costs in connection with a restructuring taken in light of general downturn in market
conditions, which were fully paid during 2005. Other operating income for 2004 includes a gain of
EUR 160 million representing the premium return under a multiline, multiyear insurance program,
which expired during 2004. The return was due to our low claims experience during the policy
period.
In all three years presented ‘‘Other operating income and expenses’’ include the costs of hedging
forecasted sales and purchases (forward points of cash flow hedges).
8. Impairment
Common
Mobile Enterprise Group
Phones Multimedia Solutions Networks Functions Group
EURm EURm EURm EURm EURm EURm
2006
Impairment of availableforsale
investments ********************* — — — — 18 18
Impairment of other intangible assets** 33 — — — — 33
Total, net ************************* 33 — — — 18 51
2005
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
During 2006, the Group’s investment in certain equity securities held as noncurrent availablefor
sale suffered a permanent decline in fair value resulting in an impairment charge of EUR 18 million
(EUR 30 million in 2005, EUR 11 million in 2004) relating to noncurrent availableforsale
investments.
In connection with the restructuring of its CDMA business, the Group recorded an impairment charge
of EUR 33 million during 2006 related to an acquired CDMA license. The impaired CDMA license was
included in Mobile Phones business group.
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 pretax discount rate of 15%.
The impaired technologies were part of Networks business group.
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