Nokia 2010 Annual Report Download - page 221

8. Impairment
2010 2009 2008
EURm EURm EURm
Goodwill ........................................................ —908 —
Other intangible assets ............................................. —56 —
Property, plant and equipment ...................................... —177
Inventories ...................................................... ——13
Investments in associated companies ................................. —19 8
Availableforsale investments ....................................... 107 25 43
Other noncurrent assets ........................................... 3—8
Total ........................................................... 110 1 009 149
Goodwill
Goodwill is allocated to the Group’s cashgenerating units (CGU) for the purpose of impairment
testing. The allocation is made to those cashgenerating units that are expected to benefit from the
synergies of the business combination in which the goodwill arose. In 2010, the Group has goodwill
allocated to two cashgenerating units, which correspond to the Group’s reportable segments:
Devices & Services CGU and NAVTEQ CGU.
The recoverable amounts for the Devices & Services CGU and the NAVTEQ CGU are based on value in
use calculations. The cash flow projections employed in the value in use calculation are based on
financial plans approved by management. These projections are consistent with external sources of
information, wherever available. Cash flows beyond the explicit forecast period are extrapolated using
an estimated terminal growth rate that does not exceed the longterm average growth rates for the
industry and economies in which the CGU operates. The impairment testing has been carried out
based on management’s assessment of financial performance and future strategies in light of current
and expected market and economic conditions. Events that occurred subsequent to the balance sheet
date, as discussed in Note 33, did not have an impact on this assessment.
Goodwill amounting to EUR 1 355 million has been allocated to the Devices & Services CGU for the
purpose of impairment testing. The goodwill impairment testing conducted for the Devices & Services
CGU for the year ended December 31, 2010 did not result in any impairment charges.
Goodwill amounting to EUR 4 368 million has been allocated to the NAVTEQ CGU. The goodwill
impairment testing conducted for the NAVTEQ CGU for the year ended December 31, 2010 did not
result in any impairment charges. The recoverable amount of the NAVTEQ CGU is between 1520%
higher than its carrying amount. The Group has concluded that a reasonably possible change of
between 12% in the valuation assumptions for longterm growth rate and discount rate would give
rise to an impairment loss.
The key assumptions applied in the impairment testing analysis for each CGU are presented in the
table below:
Devices &
Services NAVTEQ
Cashgenerating unit
%%
Terminal growth rate............................................... 2.0 4.0
Posttax discount rate .............................................. 8.7 9.6
Pretax discount rate ............................................... 11.1 12.8
F33
Notes to the Consolidated Financial Statements (Continued)