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114
Vodafone Group Plc
Annual Report 2012
Notes to the consolidated nancial statements (continued)
10. Impairment
Impairment losses
The net impairment losses recognised in the consolidated income statement, as a separate line item within operating prot, in respect of goodwill,
licences and spectrum fees, and property, plant and equipment are as follows:
2012 201112010
Cash generating unit Reportable segment £m £m £m
Italy Italy 2,450 1,050 –
Spain Spain 900 2,950 –
Greece Other Europe2450 800 –
Portugal Other Europe2250 350 –
Ireland Other Europe2– 1,000 –
Turkey Other Europe – – (200)
India India – – 2,300
4,050 6,150 2,100
Notes:
1 Impairment charges for the year ended 31 March 2011 relate solely to goodwill.
2 Total impairment losses in the Other Europe segment were £700million in the year ended 31 March 2012 (2011: £2,150 million).
Year ended 31 March 2012
The impairment losses were based on value in use calculations. The pre-tax adjusted discount rates used in the most recent value in use calculation
in the year ended 31 March 2012 are as follows:
Pre-tax adjusted
discount rate
Italy 12.1%
Spain 10.6%
Greece 22.8%
Portugal 16.9%
During the year ended 31 March 2012, impairment charges in relation to the Group’s investments in Italy, Spain, Greece and Portugal of
£2,450million, £900million, £450 million and £250 million, respectively, were reported. Of the total charge, £3,848 million relates to goodwill,
and£202 million is allocated to licence intangible assets and property, plant and equipment in Greece.
The impairment charges were primarily driven by increased discount rates as a result of increases in bond rates, with the exception of Spain where
rates have reduced marginally compared to 31 March 2011. In addition, business valuations were negatively impacted by lower cashows within
business plans reecting challenging economic and competitive conditions, and faster than expected regulatory rate cuts, particularly in Italy.
The pre-tax risk adjusted discount rates used in the previous value in use calculations at 31 March 2011 are disclosed below.
Year ended 31 March 2011
The net impairment losses were based on value in use calculations. The pre-tax adjusted discount rates used in the value in use calculation in the
year ended 31 March 2011 were as follows:
Pre-tax adjusted
discount rate
Italy 11.9%
Spain 11.5%
Greece 14.0%
Ireland 14.5%
Portugal 14.0%
During the year ended 31 March 2011 the goodwill in relation to the Group’s investments in Italy, Spain, Greece, Ireland and Portugal was impaired
by £1,050million, £2,950million, £800million, £1,000million and £350million, respectively. The impairment charges were primarily driven by
increased discount rates as a result of increases in government bond rates. In addition, business valuations were negatively impacted by lower cash
ows within business plans, reecting weaker country-level macroeconomic environments.