Annual Report 2012 - Swiss Life

186 Consolidated Financial Statements
CapitalLeben are based on present values that traditionally use a single set of estimated cash flows
and a single discount rate.
No impairment loss would arise on the goodwill relating to Lloyd Continental if the eternal growth
rate were reduced to 1% or the discount rate were increased by 1%.
No impairment loss would arise on the goodwill relating to CapitalLeben if the eternal growth rate
were set to nil (instead of 1%) or operating costs were to remain flat starting from 2013 (i.e. no further
cost reductions achieved).
The key assumptions used for the impairment testing on the carrying amount of goodwill were as
follows:
In CHF million lloyd Continental CapitalLeben Other
31.12.2012 31.12.2011 31.12.2012 31.12.2011 31.12.2012 31.12.2011
Net carrying amount of goodwill 287 287 149 149 21 21
Impairment losses – – – – 7 –
Key assumptions used for impairment tests
Growth rate 2.0% 1.0% 1.0% 1.0% 1-2% 1.0%
Discount rate 11.8% 10.5% 8.6% 9.3% 9.4-11.8% 10.5%
The growth rates were adjusted in 2012 to reflect the long-term inflation expectations of the International
Monetary Fund for the respective markets.
Goodwill relating to the acquisitions of AWD Holding AG and Deutsche Proventus AG has been allocated
to the “Insurance Switzerland”, “Insurance Germany” and “AWD” segments. The reportable
segments in these financial statements reflect the management structure that was in place until the
end of 2012. For the purpose of impairment testing, goodwill was allocated to the cash-generating
units according to the new management structure and reportable segments in place as of 2013.
The calculations relating to the recoverable amounts which have been determined on a value-in-use
basis use cash flow projections based on financial budgets approved by management.
For the impairment test in 2012, the financial budgets are based on the new management structure
that came into effect on 1 January 2013. Under the new management structure, the legal entities of
AWD have been assigned to the individual markets in which they operate. The projection covers a
three-year period for Switzerland, Germany and International (AWD AT/CEE, UK). The calculations
are based on present values that traditionally use a single set of estimated cash flows and a single
discount rate. The key assumptions used for the impairment testing on the carrying amount of goodwill
relating to AWD were as follows:
Swiss Life – Annual Report 2012