Telstra 2008 Annual Report Download - page 194
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Telstra Corporation Limited and controlled entities
191
Notes to the Financial Statements (continued)
Impairment testing
Our impairment testing compares the carrying value of an individual
asset or CGU with its recoverable amount as determined using a value
in use calculation.
Our assumptions for determining the recoverable amount of each
asset and CGU are based on past experience and our expectations for
the future. Our cash flow projections are based on five year
management approved forecasts. These forecasts use management
estimates to determine income, expenses, capital expenditure and
cash flows for each asset and CGU.
We have used the following key assumptions in determining the
recoverable amount of our CGUs to which goodwill or indefinite life
intangible assets has been allocated:
(a) Discount rate represents the pre tax discount rate applied to the
cash flow projections. The discount rate reflects the market
determined, risk adjusted, discount rate which was adjusted for
specific risks relating to the CGU and the countries in which they
operate.
The comparative discount rates have been restated to conform with
the current year presentation. This restatement has had no effect on
the results of our impairment testing conducted in 2007.
(b) Terminal value growth rate represents the growth rate applied to
extrapolate our cash flows beyond the five year forecast period.
These growth rates are based on our expectation of the CGUs long
term performance in their respective markets. The terminal growth
rates for the Australian CGUs are aligned at three percent.
21. Impairment (continued)
Discount rate
(a)
Terminal value
growth rate (b)
As at 30 June As at 30 June
2008 2007 2008 2007
%%%%
CSL New World Group. . . . . . . 10.7 10.2 2.0 2.0
KAZ Group. . . . . . . . . . . . . . 14.8 14.3 3.0 3.0
TelstraClear Group. . . . . . . . . 14.0 13.1 3.0 3.0
Telstra Europe Group . . . . . . . 9.3 8.0 3.0 3.0
Sensis Group . . . . . . . . . . . . 13.3 11.7 3.0 3.0
Universal Publishers . . . . . . . 14.0 12.3 3.0 3.0
Adstream Group . . . . . . . . . . 14.1 13.7 3.0 3.0
Telstra Business Systems. . . . . 15.6 12.5 3.0 3.0
SouFun Group . . . . . . . . . . . 17.8 16.1 5.0 5.0
1300 Australia Group . . . . . . . 16.2 -3.0 -
Trading Post Mastheads . . . . . 14.7 14.6 3.0 3.0