Page 115 - KELAG Annual Report 2019
P. 115

 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, investments in expansions or restructuring measures
           which have not yet been approved are not normally considered. However, the synergies specific
           to the asset can be considered in the measurement of value in use.

           If there are no reliable forecasts for a longer period, the calculation is based on a detailed planning
           phase of five years. In general, certain planning assumptions (e.g., forecasts of electricity prices)
           are available for a longer period of time and are used as inputs for the calculation.

           Trends in the price of electricity are usually a reflection of key estimate assumptions. If they are
           relevant to the impairment tests of individual CGUs, they are calculated as follows to determine
           the recoverable amount:

           For recoverable amounts from wind and hydroelectric power calculated on the basis of the value
           in use, price forecasts based on an electricity price forecast model are used. The price structure at
           the beginning of the planning period (2020 to 2023) is determined using the listed price for
           energy forwards or concluded agreements. Thereafter, the price levels are then matched to the
           forecasts of energy prices (using linear interpolation) in the period up to 2026. For the 2026 to
           2040 forecast period, the price structure is determined using an electricity price forecast model
           for the energy industry to prepare medium and long-term electricity price scenarios. A sustainable
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