Electrolux 2010 Annual Report Download - page 144

Intangible assets with indefinite useful lives
Goodwill as at December 31, 2010, has a total carrying value of
SEK 2,295m. In addition, the right to use the Electrolux trademark
in North America, acquired in May 2000, has been assigned an
indefinite useful life. The total carrying amount for the right is
SEK410m, included in the item Other on the next page. The allo-
cation, for impairment-testing purposes, on cash-generating units
of the significant amounts is shown in the table below. The carry-
ing amounts of goodwill allocated to Consumer Durables North
America, Europe and Asia/Pacific are significant in comparison
with the total carrying amount of goodwill.
All intangible assets with indefinite useful lives are tested for
impairment at least once every year. Single assets can be tested
more often in case there are indications of impairment. The recov-
erable amounts of the cash-generating units have been deter-
mined based on value in use calculations.
Value in use is calculated using the discounted cash-flow model
and based on a three-year forecast made by Group Management.
The forecast is built up from the estimate of the units within each
business area. The preparation of the forecast requires a number
of key assumptions such as volume, price, product mix, which will
create a basis for future growth and gross margin. These figures
are set in relation to historic figures and external reports on market
growth. The cash flow for the third year is used as the base for the
fourth year and onwards in perpetuity. A growth rate of 2% is
assumed in the in-perpetuity calculation. The discount rates used
are, amongst other things, based on the individual countries’ infla-
tion, interest rates and country risk. The pre-tax discount rates
used in 2010 were for the main part within a range of 8.5% to
19.4%. Management believes that any reasonably possible
adverse change in the key assumptions would not reduce the
recoverable amount below its carrying amount.
Goodwill, value of trademark and discount rate
Goodwill Electrolux trademark Discount rate, %
Europe 368 — 9.9
North America 379 410 10.1
Asia/Pacific 1,468 — 10.8
Other 80 — 8.5–19.4
Total 2,295 410 8.5–19.4
Property, plant and equipment
Parent Company
Land and
land improve-
ments Buildings
Machinery
and technical
installations Other equipment Plants under construction
Total
Acquisition costs
Opening balance, January 1, 2009 6 57 1,133 362 17 1,575
Acquired during the year — — 20 — 1 21
Transfer of work in progress and advances — — 10 1 –11 —
Sales, scrapping, etc. –2 — –289 — — –291
Closing balance, December 31, 2009 4 57 874 363 7 1,305
Acquired during the year — — 44 10 60 114
Transfer of work in progress and advances — — 1 — –1 —
Sales, scrapping, etc. — — –1 –93 — –94
Closing balance, December 31, 2010 4 57 918 280 66 1,325
Accumulated depreciation
Opening balance, January 1, 2009 2 53 859 287 —1,201
Depreciation for the year — 1 65 22 — 88
Sales, scrapping, etc. — — –258 –4 — –262
Closing balance, December 31, 2009 2 54 666 305 — 1,027
Depreciation for the year — — 56 18 — 74
Sales, scrapping, etc. — — 56 –94 — –38
Closing balance, December 31, 2010 2 54 778 229 — 1,063
Net carrying amount, December 31, 2009 2 3 208 58 7 278
Net carrying amount, December 31, 2010 2 3 140 51 66 262
NOTE 13 Goodwill and other intangible assets
Acquired during the year includes the financial lease for the North
American head office in the US with SEK 153m. Property, plant and
equipment in operations within appliances in Consumer Durables
Europe and North America were impaired in 2010. Total impairments
at year-end were SEK 236m (258) on buildings and land, and
SEK 386m (459) on machinery and other equipment, whereof SEK
192m (450) are related to restructuring costs for the factories in
Motala (Sweden), Forli (Italy) och L’Assomption (Canada). The carry-
ing amount for land was SEK 693m (746). The tax assessment value
for Swedish Group companies for buildings was SEK 158m (158),
and land SEK 29m (29). The corresponding carrying amounts for
buildings were SEK 30m (32), and land SEK 9m (9). Electrolux did not
capitalize any interests on borrowings in 2010 or 2009.
Tax assessment value for buildings within the Parent Company
was SEK 116m (116), and for land SEK 18m (18). The correspond-
ing carrying amounts for buildings were SEK 3m (3), and for land
SEK 2m (2).
annual report 2010 | part 2 | notes, all amounts in SEKm unless otherwise stated
Cont. Note 12
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