Unilever 2010 Annual Report Download - page 91

88 Unilever Annual Report and Accounts 2010
Financial statements
Notes to the consolidated financial statements Unilever Group
9 Goodwill and intangible assets (continued)
€ million € million € million € million € million
Indefinite- Finite-
lived lived
intangible intangible
Movements
Cost
during 2009 Goodwill assets assets Software Total
1 January 2009 12,617 4,107 598 580 17,902
Acquisitions of group companies 350 105 1 – 456
Disposals of group companies – (1) – – (1)
Additions – 1 – 149 150
Disposals – – – (72) (72)
Currency retranslation 441 57
4,269
12
611
30
687
540
18,97531 December 2009 13,408
Amortisation and impairment
1 January 2009 (952) (221) (392) (246) (1,811)
Disposal of group companies – – – – –
Amortisation for the year – – (58) (110) (168)
Disposals – – – 62 62
Currency retranslation 8 2
(219)
4,050
(8)
(458)
153
(13)
(307)
380
(11)
(1,928)
17,047
31 December 2009
Net book value 31 December 2009
(944)
12,464
There are no significant carrying amounts of goodwill and intangible assets that are allocated across multiple cash generating units (CGUs).
Impairments charge in the year
There were no material impairments in either 2010 or 2009.
Significant CGUs
The goodwill and indefinite-lived intangible assets (predominantly Knorr and Hellmann’s) held in the regional Savoury, Dressings and Spreads CGUs
are considered significant in comparison to the total carrying amounts of goodwill and indefinite-lived intangible assets at 31 December 2010.
Noother CGUs are considered significant in this respect.
The goodwill and indefinite-lived intangible assets held in the regional Savoury and Dressings CGUs are:
€ billion € billion € billion € billion
2010 2010 2009 2009
Indefinite- Indefinite-
lived lived
Goodwill
intangibles Goodwill intangibles
Western Europe 5.2 1.4 5.2 1.3
The Americas 4.2 1.5 3.9 1.3
Asia Africa CEE 1.8 0.6 1.9 0.6
During 2010, we conducted an impairment review of the carrying value of these assets. Value in use in the regional Savoury, Dressings and
Spreads CGUs has been calculated as the present value of projected future cash flows. A pre-tax discount rate of 10% was used.
The following key assumptions were used in the discounted cash flow projections for the regional Savoury, Dressings and Spreads CGUs:
• a longer-term sustainable growth rate of 2% to 3% for Western Europe, 3% to 5% for The Americas and 8% to 9% for Asia Africa CEE;
• average near-term nominal growth rates for the major product groups within the CGUs of 2% Western Europe, 4% The Americas, 10%forAsia
Africa CEE; and
• average operating margins for the major product groups within the CGUs ranging from 18% to 21% Western Europe, 17% to 23%
TheAmericas and 10% to 14% Asia Africa CEE.
The growth rates and margins used to estimate future performance are based on past performance and our experience of growth rates and
margins achievable in our key markets. We believe that the assumptions used in estimating the future performance of the regional Savoury,
Spreads and Dressings CGUs are consistent with past performance.
The projections covered a period of ten years as we believe this to be a suitable timescale over which to review and consider annual performance
before applying a fixed terminal value multiple to the final year cash flows of the detailed projection. Stopping the detailed projections after five
years and applying a terminal value multiple thereafter would not result in a value in use that would cause impairment.
The growth rates used to estimate future performance beyond the periods covered by our annual planning and strategic planning processes
donotexceed the long-term average rates of growth for similar products.
We have performed sensitivity analyses around the base case assumptions and have concluded that no reasonable possible changes in key
assumptions would cause the recoverable amount of the regional Savoury, Spreads and Dressings CGUs to be less than the carrying amount.