SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank Notes to the Consolidated Balance Sheet F-118
Annual Report 2010 on Form 20-F 24 – Goodwill and Other Intangible Assets
The DCF model uses earnings projections and respective capitalization assumptions based on financial plans
agreed by management which, for purposes of the goodwill impairment test, are extrapolated to a five-year
period and are discounted to their present value. Estimating future earnings and capital requirements involves
judgment, considering past and actual performance as well as expected developments in the respective markets,
in the overall macroeconomic and regulatory environment. Earnings projections beyond the initial five-year
period are, where applicable, adjusted to derive a sustainable level and assumed to increase by or converging
towards a constant long-term growth rate of 3.7 %, which is based on expectations for the development of
gross domestic product and inflation, and are captured in the terminal value.
Key Assumptions and Sensitivities
Key Assumptions: The value in use of a cash-generating unit is sensitive to the earnings projections, to the
discount rate applied and, to a much lesser extent, to the long-term growth rate. The discount rates applied
have been determined based on the capital asset pricing model which is comprised of a risk-free interest rate,
a market risk premium and a factor covering the systematic market risk (beta factor). The values for the risk-free
interest rate, the market risk premium and the beta factors are determined using external sources of information.
Business-specific beta factors are determined based on a respective group of peer companies. Variations in all
of these components might impact the calculation of the discount rates.
The following table summarizes descriptions of key assumptions underlying the projected future earnings,
management’s approach to determining the values assigned to key assumptions as well as the uncertainty
associated with the key assumption and potential events and circumstances that could have a negative effect
for the Group’s primary cash-generating units.