+1 - Solvay

Financial
(23) Goodwill
EUR Million
Gross carrying amount
At 31 December 2005 1 079
Arising on acquisitions 148
Impairments 0
Currency translation differences -13
At 31 December 2006 1 214
Arising on acquisitions 32
Impairments -26
Currency translation differences -10
At 31 December 2007 1 210
In 2007, the increase in goodwill comes from the recognition of an earn-out payable to the former Fournier
shareholders (EUR 30 million) and the acquisition of Quality Plastics (EUR 3 million).
Total
87
The goodwill impairment tests led to EUR 26 million of impairment losses being recognized in 2007:
EUR 16 million on Girindus (Molecular Solutions), EUR 7 million on Solvay Chemicals Inc. (fluor) and EUR 3 million
on Solvay Speciality Chemicals Ltd (Advanced Functional Minerals). For these tests, the Group prepares cash-flow
forecasts based on the most recent financial projections approved by executive management for the next five years.
For the following years, the extrapolation of the cash flows is based on a growth rate which does not exceed
the average long-term growth rate of the markets in question.
The forecasted cash flows for each of the cash-generating units concerned have been discounted to net present
value at specific rates, based on external references and measuring the risks inherent to the specific sector and
geographic location of the cash-generating units. These discount rates range between 7.3 % and 9.1 %.
The essential part of the goodwill comes from the Fournier acquisition in 2005. To the extent that this goodwill
represents in each country synergies which will benefit all Pharmaceuticals Sector products, goodwill cannot be
allotted by product, but only by region. As a result, the cash-generating units used for the annual impairment tests
on this particular goodwill item are based on the regions.
Solvay Global Annual Report 2007