AI Annual Report 2019 1
Impairment testing of goodwill Goodwill is monito
red by the management at Group level. Impairment testing of goodwill attributable to cash-generating units and other intangible assets is conducted annually. Estimated recoverable amount are based on the management's expectations of future earnings and cash flow. The estimated cash flows are based on five-year forecasts using estimated market trends. After the five-year period, the cash flow is based on a permanent growth rate of 2% (2%). The following cash-generating units have reported goodwill values; Hedin Bil, Sweden Hedin Automotive, Norway Hedin Automotive, Belgium Total 12/31/2019 165,192 903,177 352,492 1,420,861 12/31/2018 165,197 829,864 156,523 1,151,584 The breakdown of cash-generating units has changed as the Swedish units are merged into one common unit, due to that these units are increasingly integrated with each other. Division into the cash-generating units reflects the corresponding division into operating segments. NOTE 14 TANGIBLE ASSETS Lands and buildings Acquisition costs Opening balance 01/01/2018 Purchase Business acquisitions Sales/disposals Conversion differences Closing balance 12/31/2018 IFRS 16 Purchase Business acquisitions Sales/disposals Transfers Conversion differences Closing balance 12/31/2019 Accumulated depreciation Opening balance 01/01/2018 Depreciation for the year Sales/disposals Conversion differences Closing balance 12/31/2018 Depreciation for the year Sales/disposals Conversion differences Closing balance 12/31/2019 Carrying amount 12/31/2018 Carrying amount 12/31/2019 0 282,463 -2,513 279,950 65,769 93,234 4,185 -1,510 1,472 163,150 460,001 97,434 460,001 -14,707 15,039 600,489 1,437,975 833,602 571,086 -585,507 9,937 1,696,007 0 5,126 7,074 -2,789 2,280 4,237 295,878 81,470 24,809 -512 2,762 916 272,595 84,610 24,384 -12,570 -22,151 4,239 679,001 1,608,117 121,420 -879,981 9,644 2,555,207 4,495,682 508,124 289,986 17,109 33,981 5,344,882 1,963,745 1,024,270 329,370 -601,724 23,935 2,739,596 4,495,682 2,287,447 467,673 -895,852 0 53,017 9,147,563 Costs incurred on another´s property Equipment, tools and installations Leasing vehicles Right-of-use assets Total When calculating recoverable amount for cash-generating units, a discount factor of 9.3% (9.5%) before tax has been used, based on the weighted average cost of capital (WACC) and value in use, as the basis for the recoverable amount. The recoverable amount exceeds goodwill for all cash-generating units. The surplus value is naturally different between the various units, where recently completed acquisitions have lower surplus value. However, all goodwill values have a surplus value with an increased WACC of 0.5% and a reduced growth of 10%. 0 -3,228 -10,617 -1,125 -11,742 -8,681 431 -2,677 -22,669 268,208 273,209 -15,008 -1,981 -20,217 -28,192 -150 -48,559 142,933 224,036 -276,215 -79,050 8,408 -8,504 -355,361 -80,992 9,633 -3,808 -430,528 245,128 -165,057 -340,915 150,726 5,501 -349,745 -472,993 272,140 -76 -550,674 1,346,262 248,473 2,004,533 0 -532,157 -444,500 -445,590 159,134 -6,109 -737,065 -1,123,015 282,204 -6,711 -532,157 0 4,812,725 -1,584,587 2,002,531 7,562,976 64 I.A. HEDIN BIL AB / ANNUAL REPORT / 2019