You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Net value of goodwill<br />
At December 31, 2006, goodwill breaks down by geographic area<br />
as follows: France (€477 million), United Kingdom (€477 million),<br />
Benelux (€438 million), North America (€199 million), and Germany<br />
and Central Europe (€132 million).<br />
Changes in the net value of goodwill in 2006 primarily reflect:<br />
goodwill relating to the acquisition of German group FuE on September<br />
30, 2006, amounting to €29 million;<br />
goodwill relating to the acquisition of Unilever Shared Service<br />
Limited (also known as Indigo) on October 11, 2006, amounting<br />
to €20 million (including the call option on minority interests);<br />
an impairment loss on United Kingdom goodwill amounting to<br />
€3 million;<br />
The main assumptions used to measure the recoverable amount of goodwill are as follows:<br />
Cash generating units<br />
North<br />
America<br />
translation losses arising on goodwill denominated in foreign currencies,<br />
amounting to €13 million.<br />
Goodwill impairment tests<br />
The carrying amounts of goodwill at December 31, 2006 were tested<br />
for impairment in accordance with the Group’s related specific procedure.<br />
Based primarily on the discounted cash flows method, this<br />
procedure consists of assessing the recoverable amount of each cash<br />
generating unit (CGU) within the Group.<br />
CGUs correspond either to subsidiaries or to geographic areas in<br />
which the Group has operations.<br />
United<br />
Kingdom Benelux Sogeti Other Total<br />
Net carrying amount of goodwill (in millions of euros) 199 477 307 505 361 1,849<br />
Method used to measure the value of the CGU Value in use<br />
Number of years over which cash flows are estimated and<br />
extrapolated indefinitely<br />
5 years<br />
Long-term growth rate 3%<br />
After-tax discount rate at December 31, 2006 (1) 10.9 % 10.1%<br />
After-tax discount rate at December 31, 2005 (1) 10.5 % 10.1%<br />
After-tax discount rate at December 31, 2004 (1) 10.1 %<br />
(1) The application of pre-tax discount rates to pre-tax cash flows leads to the same valuation of CGUs.<br />
Reconciliation of the acquisition cost of intangible assets in the balance sheet with the amount reported in the cash flow<br />
statement<br />
The acquisition cost of intangible assets reported in the balance sheet (€30 million) is different from the figure provided in the cash flow<br />
statement (€29 million), which excludes transactions with no cash impact (i.e., acquisitions of assets held under finance leases amounting<br />
to €1 million in 2006).<br />
ANNUAL REPORT 2006 <strong>Capgemini</strong><br />
85
Change language