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AAK Annual Report 2016

69 127(±,17$1*,%/($66(76 Group Goodwill Patents and other intangible assets Total Cost at January 1, 2015 1,327 320 1,647 Investments - 25 25 Acquired through business combination 230 256 486 Exchange differences 10 -4 6 $FFXPXODWHGFRVWDW'HFHPEHU 2,164 Cost at January 1, 2016 1,567 597 2,164 Investments - 11 11 Acquired through business combination 46 - 46 Disposals - -6 -6 Reclassifications - -9 -9 Exchange differences 73 15 88 Accumulated cost at December 31, 2016 2,294 Amortization and impairment loss at January 1, 2015 0 193 193 Impairment losses for the year - 28 28 Exchange differences - -1 -1 $FFXPXODWHGDPRUWLDWLRQDQGLPSDLUPHQWORVVDW'HFHPEHU 0 220 220 Amortization and impairment loss at January 1, 2016 0 220 220 Impairment losses for the year - 34 34 Disposals - -6 -6 Exchange differences - 3 3 Accumulated amortization and impairment loss at December 31, 2016 0 5HVLGXDOYDOXHDW'HFHPEHU 377 1,944 Residual value at December 31, 2016 2,043 Reviewing impairment of goodwill In preparing the financial statements for 2016, the Group has reviewed impairment of goodwill. Goodwill is allocated to cash-generating units. The recoverable amount for a cash-generating unit is determined by calculating its value in use. These calculations are based on estimated future cash flow as stated in budgets and forecasts covering a five-year period. Cash flow beyond this period has been extrapolated by no more than 3 percent (3) in any case. Working capital beyond the five-year period is estimated at the same level as year five. Discount rates are assumed to be 9 percent (9) after tax and 12.8 percent (12.8) before tax. Goodwill testing of the Swedish, Danish, Belgian and Dutch units was done at an aggregate level, whereby the four production units were considered as a single cash-generating unit. Other goodwill testing considered cash-generating units at country level. Approximately 35 percent of goodwill is attributable to the business area Chocolate & Confectionery Fats and the remaining approximately 65 percent to Food Ingredients. Testing has not demonstrated any need for impairment. The sensitivity in these calculations indicates that recognized goodwill is still intact even if the discount rate increases by 1 percent or if long-term growth is 1 percent less. Goodwill by cash-generating unit 2016 Scandinavia, including Belgium and the Netherlands 535 512 United Kingdom 66 74 Turkey 52 58 USA 700 651 Colombia 51 45 Mexico 43 - India 239 227 Total


AAK Annual Report 2016
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