Annual Report 2010 - Falck

Notes to the Group financial statements
Note DKK million
15 Intangible assets (contiued)
Group | Falck Annual Report 2010 75
Impairment tests of goodwill
Goodwill is tested for impairment at least once a year, and more frequently if there are indications of impairment. In impairment tests,
the discounted value of the future net cash flows of each of the cash-generating units (value in use) are compared with their carrying
amounts.
2010 2009
Goodwill is related to the following business areas:
Assistance 1,948 1,805
Emergency 956 480
Healthcare 761 781
Training 1,046 1,009
Total goodwill 4,711 4,075
In connection with the company's acquisition of the shares in Falck A/S in 2004/05 (merged with the parent company on 1 January
2009), goodwill with a carrying value of DKK 2,630 million was allocated to the respective business areas
For the above mentioned business areas, goodwill is tested for impairment in the relevant cash generating units within the business
areas based on the following parameters and assumptions:
The future net cash flows are based on the consolidated budget for 2011 and the Group’s strategic plan for the period until 2015.
Moreover, growth during the terminal period has been estimated at 2-3% (2009: 3.0%).
The key parameters for the impairment test are performance in terms of revenue and the operating margin. As capital tied up in net
operating assets is generally low in the Group, this parameter does not have any material impact on the impairment test.
The Assistance activities primarily consist of subscriptions and are therefore stable from year to year. The discount rate has been set at
8% (2009: 8%).
The Emergency activities primarily consist of ambulance services, including transportation of patients, and of fire fighting for public
customers, and they do not fluctuate materially from year to year. Emergency also includes Fire Services which consist of long-term
contracts and training and consulting services for private companies in several countries. The discount rate for Emergency has been set
at 8% (2009: 8%).
The Healthcare activities primarily consist of subscriptions and longer term contracts and are therefore stable from year to year. The
discount rate has been set at 8% (2009: 8%). Substantial growth is expected in the Healthcare business in the years ahead.
Healthcare also includes staffing business which mainly consists of payments on a case-by-case basis. The discount rate has therefore
been set at 9% (2009: 9%).
Training is to an extent affected by the activity level in the oil industry. The discount rate has therefore been set at 9% (2009: 9%). The
main assumptions in the strategic plan until 2015 are the expected organic growth and that off-shore exploration activities will pick up
pace.
The impairment tests of goodwill did not result in any impairment.