Addnode Group Annual Report 2015 | Page 59

ANNUAL REPORT Notes

Impairment testing of goodwill and other intangible assets with indefinite useful life is conducted yearly or more often if there is an indication of a decline in value .

The recoverable amount for a cash-generating unit is determined based on calculations of value in use . These calculations use pre-tax cash flow projections based on financial budgets and forecasts approved by company management and covering a five-year period . The cash flow forecasts are based on an assessment of the anticipated growth rate and development of the EBITA margin ( operating margin before amortisation and impairment of intangible assets ), starting from the budget for the next year , forecasts for the next four years , management ’ s long-term expectations on the operations , and the historical trend . The calculated value in use is most sensitive to changes in the assumption about the growth rate , EBITA margin and discount rates . Applied assumptions are based on previous experience and the market trend . The cash flow forecasts for years two to five are based on an annual growth rate of 4 ( 4 ) per cent for Product Lifecycle Management and Process Management and 4 ( 2 ) per cent for Content Management .

For Design Management , against the background of the changed business model for Autodesk products , the assumption is that net sales will decrease by 4 per cent from 2016 to 2017 and thereafter increase in the years immediately following by 5 per cent ,

6 per cent and 5 per cent , respectively . In previous years the cash flow forecasts for Design Management were based on an annual growth rate of 4 per cent for years two to five . Cash flow beyond the five-year period is extrapolated using an estimated long-term growth rate of 2 per cent ( 2 ) for all cash-generating units . The growth rate does not exceed the long-term average growth rate according to industrial reports for the markets in which each cash-generating unit operates . The discount rate used in calculating the recoverable amount is 13 per cent ( 13 ) before tax . The required rate of return has been established based on the Group ’ s current capital structure and reflects the risks that apply for the various operating segments .

Based on the impairment testing carried out to date , there is no need to recognise impairment for goodwill or other intangible assets with indefinite useful life at 31 December 2015 . In 2014 , goodwill decreased by SEK 30 m through recognition of an impairment loss in the Content Management business area as a result of weak earnings performance during the year up through 2014 .

An increase of the discount rate by 2 percentage points , a decrease in the operating margin before amortisation and impairment of intangible assets ( the EBITA margin ) by 2 percentage points , or a reduction in the assumed long-term growth rate by 2 percentage points would each not result in any need to recognise impairment as at 31 December 2015 .

NOTE 17 PROPERTY , PLANT AND EQUIPMENT

NOTE 18 PARTICIPATIONS IN GROUP COMPANIES

Equipment and installations

Group Parent Company 31 / 12 / 2015 31 / 12 / 2014 31 / 12 / 2015 31 / 12 / 2014

Parent Company 31 / 12 / 2015 31 / 12 / 2014

Opening depreciation – 52,340 – 45,790 – 186 – 180

1 )

The year ’ s investments in subsidiaries include estimated contingent consideration ( earn-out payments ) totalling SEK 46,340 thousand . The outcome is dependent on the revenue and earnings performance of the acquired companies .

2 )

The sales in 2015 were made to other Group companies

Group Land and buildings 31 / 12 / 2015 31 / 12 / 2014 Opening cost 814 814

Closing accumulated cost 814 814

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