FINANCIAL STATEMENTS - KPN

Consolidated Financial Statements
Notes to the Consolidated Statement of Income continued
[4] Depreciation, amortization and impairments
Amounts in millions of EUR 2012 2011
Impairment of goodwill 314 154
Amortization of other intangible assets [10] 863 859
Impairment of other intangible assets [10] 12 35
Total amortization and impairments of goodwill and other intangible assets 1,189 1,048
Depreciation of property, plant and equipment [11] 1,472 1,400
Impairments and retirements of property, plant and equipment [11] 47 140
Total depreciation and impairments of property, plant and equipment 1,519 1,540
Impairment of assets held for sale [18] – 1
Total 2,708 2,589
[..] Bracketed numbers refer to the related notes.
Impairment Corporate Market 2012
During 2012, continued adverse market trends and price pressure negatively impacted the performance and outlook of Corporate Market.
As a result the annual impairment testing led to an impairment of goodwill of Corporate Market of EUR 314 million. Reference is made to Note 10.
Impairment Corporate Market 2011
During 2011, the triggering event analysis and regular annual impairment testing resulted in an impairment of both non-current assets and
goodwill of Corporate Market. As part of the new strategy implemented as of May 2011, the international businesses of Getronics were considered
non-core. Taking into account the fact that these businesses could be sold separately and were able to generate cash flows independently the
following CGUs were defined for impairment testing as at December 31, 2011 of the non-current assets other than goodwill:
1) Netherlands;
2) Belgium, Luxemburg, United Kingdom and the rest of the world;
3) Latin America.
In a first step, the non-current assets (excluding goodwill) were tested at the level of the lowest cash generating unit for which specific triggering
events were identified. The recoverable amount of these assets is its fair value less costs to sell, which is based on the future cash flows.
For Getronics International the selling price of these businesses on the active market has been used. The impairment tests resulted in an
impairment of EUR 28 million on other intangible assets and an impairment EUR 116 million on property, plant and equipment.
In a second step, following the impairment of the individual assets, the goodwill allocated to Corporate Market has been tested for impairment
which resulted in an impairment of EUR 154 million. Reference is made to Note 10.
Other impairments and depreciation
Depreciation and impairments on property, plant and equipment are detailed as follows:
Amounts in millions of EUR 2012 2011
By classification:
Land and buildings 81 162
Plant and equipment 1,365 1,297
Other tangible fixed assets 58 74
Assets under construction 15 7
Total 1,519 1,540
In 2012 assets under construction in relation to the mobile network in Germany were reclassified to plant and equipment for EUR 451 million.
As a result, a one-off additional depreciation charge of EUR 74 million was recorded, of which EUR 61 million related to prior years.
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KPN | Annual Report 2012