Nokia 2015 Annual Report Download - page 150

148 NOKIA IN 2015
10. Impairment
Continuing operations
Goodwill
The goodwill impairment assessment for the Nokia Networks Radio Access Networks group of CGUs in Mobile Broadband and Global Services
group of CGUs was carried out at November 30, 2015 (November 30 in 2014).
The carrying value of goodwill allocated to the Group’s CGUs at the impairment testing date:
EURm 2015 2014
Global Services 124 106
Radio Access Networks in Mobile Broadband 115 96
The recoverable amounts of the Group’s CGUs were determined using the fair value less costs of disposal method. In the absence of observable
market prices, the recoverable amounts were estimated based on an income approach, specically a discounted cash ow model. The valuation
method is in line with the previous year. The cash ow projections used in calculating the recoverable amounts are based on nancial plans
approved by management covering an explicit forecast period of ve years and reect the price that would be received to sell the CGU in
anorderly transaction between market participants at the measurement date. The level of fair value hierarchy within which the fair value
measurement is categorized is level 3. Refer to Note 19, Fair value of nancial instruments for the fair value hierarchy.
The key assumptions applied in the impairment testing analysis for the CGUs:
Key assumption %
2015 2014 2015 2014
Radio Access Networks group
of CGUs in Mobile Broadband Global Services group of CGUs
Terminal growth rate 1.0 2.6 1.0 1.6
Post-tax discount rate 9.2 9.4 8.7 9.1
Terminal growth rates reect long-term average growth rates for the industry and economies in which the CGUs operate. The discount rates
reect current assessments of the time value of money and relevant market risk premiums. Risk premiums reect risks and uncertainties for
which the future cash ow estimates have not been adjusted. Other key variables in future cash ow projections include assumptions on
estimated sales growth, gross margin and operating margin. All cash ow projections are consistent with external sources of information,
wherever possible.
Management has determined the discount rate and the terminal growth rate to be the key assumptions for the Nokia Networks Radio Access
Networks group of CGUs and the Global Services group of CGUs. The recoverable amounts calculated based on the sensitized assumptions do
not indicate impairment in 2015 or 2014. Further, no reasonably possible changes in other key assumptions on which the Group has based its
determination of the recoverable amounts would result in impairment in 2015 or 2014.
In 2014, the Group recorded an impairment charge of EUR 1 209 million relating to the discontinued HERE CGU. Refer to Note 3, Disposals
treated as Discontinued operations.
Other non-current assets
Impairment charges by asset category:
EURm 2015 2014 2013
Property, plant and equipment –– 12
Available-for-sale investments 11 15 8
Total 11 15 20
Property, plant and equipment
In 2013, Nokia Networks recognized an impairment charge of EUR 6 million following the remeasurement of the Optical Networks disposal group
at fair value less cost of disposal. In 2013, the Group recognized impairment losses of EUR 6 million relating to certain properties attributable
toGroup Common Functions.
Available-for-sale investments
The Group recognized an impairment charge of EUR 11 million (EUR 15 million in 2014 and EUR 8 million in 2013) as certain equity securities
held as available-for-sale suered a signicant or prolonged decline in fair value. These charges are recorded in Otherexpenses and Financial
income and expenses.
Notes to consolidated nancial statements continued