Atari 2010 Annual Report Download - page 75

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
75
Management set the discount rate on the basis of the weighted average cost of capital, reflecting the market's current
assessment of the time value of money and the specific risks to which the various cash-generating units are exposed. In
view of the current division of the Group's activities, the allocation of goodwill per CGU and the Group's general risk
premium included in the discount rate, the use of a single discount rate for all of the Group's CGUs was judged
appropriate for the impairment tests. The discount rates used are post tax rates applied to post tax cash flows. They yield
the same recoverable amounts as would be obtained by applying pre-tax discount rates to pre-tax cash flows, as
required under IAS 36.
The Group prepared its cash flow projections on the basis of the 2010-2011 budgets and its business plan. Growth-rate
assumptions in the business plan reflect management's best estimates and are based notably on (i) the expectation that
business will recover and will be driven by online distribution sales and on (ii) a comparable cost structure to the one
achieved in 2009-2010.
At March 31, 2010, the sensitivity of the recoverable amounts of the Group's CGUs to a one-point change in the discount
rate or the perpetuity growth rate was as follows:
Cash-generating unit
/(##0
+ 1 pt. - 1 pt. + 1 pt. - 1 pt.
#1#23#"
,
,
,
,
,
41
,
,
,
,
,
Difference
between
recoverable
amount and
carrying amount
Impact of a one-point change in:
Discount rate Perpetuity growth rate
NOTE 4 – INTANGIBLE ASSETS
Changes in intangible assets for the year ended March 31, 2010 can be analyzed as follows:
(€ millions) Games Trademarks Licences Software Other Total
Gross value
April 01, 2009 84.9 16.7 55.0 32.7 4.8 194.1
Change in scope of consolidation -
Acquisitions / Increase 19.0 2.4 0.1 21.5
Disposals / Decrease (48.2) (9.3) (3.4) (60.9)
Reclassification as assets held for sale -
Other changes (1.5) (0.2) (0.2) (0.3) (0.1) (2.3)
March 31, 2010 54.2 16.5 47.9 29.1 4.7 152.4
Amortization and provisions for impairment value
April 01, 2009 (52.9) (13.8) (47.4) (31.1) (4.3) (149.5)
Change in scope of consolidation -
Charges to amortization and provisions (26.6) (0.3) (4.7) (0.8) (0.4) (32.8)
Reversal of amortization and provisions -
Disposals / Decrease 48.2 8.3 3.4 59.9
Reclassification as assets held for sale -
Other changes 0.6 0.2 0.1 0.3 0.1 1.3
March 31, 2010 (30.7) (13.9) (43.7) (28.2) (4.6) (121.1)
Net value -
April 01, 2009 32.0 2.9 7.6 1.6 0.5 44.6
Change in scope of consolidation - - - - - -
Acquisitions / Change to amortization and provisions (7.6) (0.3) (2.3) (0.7) (0.4) (11.3)
Disposals / Reversal of amortization and provisions - - (1.0) - - (1.0)
Reclassification as assets held for sale - - - - - -
Other changes (0.9) - (0.1) - - (1.0)
March 31, 2010 23.5 2.6 4.2 0.9 0.1 31.3
The increase in games recognized under intangible assets for the year ended March 31, 2010 primarily reflects:
 the capitalization of €15.8 million worth of in-house development expenditure subsequent to the completion of
the pre-production phase;
 the capitalization of €3.2 million in costs relating to development projects outsourced by the Group.