Page 41 - Annual Report KELAG Group 2018
P. 41

The  carrying  amounts  of  entities  accounted  for  using  the  equity  method  are  tested  for
                                      impairment on the basis of forecasts for future cash flows as well as using a discount rate adjusted
                                      to the industry and the company risk (see Note 12).

                                      Primarily if the following indications arise, the carrying amounts of investments accounted for in
                                      the consolidated financial statements using the equity method are tested for impairment:

                                          Substantial financial difficulties on the part of the investee;
                                          Breach of contract, such as default or delayed interest or principal payment;
                                          An increased likelihood that the investee will enter bankruptcy or other financial
                                          reorganisation;
                                          Observable data that indicate a measurable decrease in the estimated future cash flows of the
                                          investee.

                                      Goodwill and intangible assets with an indefinite useful life are tested for impairment at each
                                      reporting date. The recoverability of other non-financial assets is reassessed if there are internal
                                      or external indications of possible impairment. The following indicators are examples of when a
                                      non-financial asset would be tested for impairment:

                                          Decrease in the market value (above and beyond depreciation);
                                          Adverse changes in the technological, market-related economic or legal environment;
                                          Increase in the market interest rates;
                                          Obsolescence or physical damage;
                                          Lower economic performance of an asset than expected.

                                      The  calculation  of  a  possible  impairment  loss  (see  Notes  10  and  11)  of  a  non-financial  asset
                                      necessitates the calculation of the value in use or fair value of the cash-generating unit to which
                                      the non-financial asset is allocated. Calculation of the value in use is based on estimates of future
                                      cash flows of the cash-generating unit, taking account of the risks, and an appropriate discount
                                      rate.  When  calculating  the  value  in  use,  no  investments  in  expansions  or  restructuring  are
                                      considered. However, the synergies specific to the asset can be considered in the measurement
                                      of fair value.

                                      If there are no reliable forecasts for a longer period, the calculation is generally based on a detailed
                                      planning phase of five years. If certain planning assumptions (e.g., forecasts of electricity prices)
                                      are available for a longer period of time, these are used as inputs for the calculation. No material
                                      changes  in  the  assumptions  used  were  evident  by  the  time  the  financial  statements  were
                                      finalised.
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