Nokia 2009 Annual Report Download - page 209

7. Impairment (Continued)
The Group has applied consistent valuation methodologies for each of the Group’s CGUs for the years
ended December 31, 2009, 2008 and 2007. The discount rates applied in the impairment testing for
each CGU have been determined independently of capital structure reflecting current assessments of
the time value of money and relevant market risk premiums. Risk premiums included in the
determination of the discount rate reflect risks and uncertainties for which the future cash flow
estimates have not been adjusted. Overall, the discount rates applied in the 2009 impairment testing
have decreased in line with declining interest rates and narrowing credit spreads.
The goodwill impairment testing conducted for each of the Group’s CGUs for the years ended
December 31, 2008 and 2007 did not result in any impairment charges.
Other intangible assets
In conjunction with the Group’s decision to refocus its activities around specified core assets, the
Group recorded impairment charges in 2009 totalling EUR 56 million for intangible assets arising from
the acquisitions of Enpocket and Intellisync and the asset acquisition of Twango. The impairment
charge was recognised in other operating expense and is included in the Devices & Services segment.
In connection with the decline in the Group’s profit and cash flow projections of the Nokia Siemens
Networks CGU, the Group conducted an assessment of the carrying amount of the identifiable
intangible assets arising from the formation of Nokia Siemens Networks concluding that such carrying
amount was recoverable.
Property, plant and equipment and inventories
In 2008, resulting from the Group’s decision to discontinue the production of mobile devices in
Germany, an impairment loss was recognised amounting to MEUR 55. The impairment loss related to
the closure and sale of production facilities at Bochum, Germany and is included in the Devices &
Services segment.
In 2008, Nokia Siemens Networks recognised an impairment loss amounting to EUR 35 million
relating to the sale of its manufacturing site in Durach, Germany. The impairment loss was
determined as the excess of the book value of transferring assets over the fair value less costs to sell
for the transferring assets. The impairment loss was allocated to property, plant and equipment and
inventories.
Investments in associated companies
After application of the equity method, including recognition of the associate’s losses, the Group
determined that recognition of an impairment loss of EUR 19 million in 2009 (EUR 8 million in 2008,
EUR 7 million in 2007) was necessary to adjust the Group’s net investment in the associate to its
recoverable amount.
Availableforsale investments
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 25 million in 2009 (EUR
43 million in 2008, EUR 29 million in 2007).
8. Acquisitions
Acquisitions completed in 2009
During 2009, the Group completed five acquisitions that did not have a material impact on the
consolidated financial statements. The purchase consideration paid and the total goodwill arising
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Notes to the Consolidated Financial Statements (Continued)