FINANCIAL REPORT 2012 - Keolis

36 2. CONSOLIDATED FINANCIAL STATEMENTS
The changes in goodwill during the 2012 financial year are explained by:
The acquisition by Eurobus Holding of Sprl Bertrand in September 2012, generating €1 million of goodwill.
The payment of the remainder of the acquisition price for Keolis Transit America, generating €1 million of goodwill.
The cessation of Maritimes activities in Groupe Orleans Express, generating an impairment charge of €4 million.
The allocation of KTA’s goodwill composed of contractual rights and trademarks for an amount of €15 million.
The main assumptions made for impairment tests are as follows:
Discount rate:
The discount rate used is based on the average cost of capital reflecting current market assessments of the time value of
money and the risks specific to the tested asset.
The average weighted cost of capital has been determined with a combination of two methods: the “Capital Asset Pricing
Model” (CAPM) method and the average weighted cost of capital method for comparable listed companies. In view of these
factors, the cost of capital used to discount future cash flows was set at 7% in 2012, as against 6.8% in 2011.
These discount rates are rates after tax applied to cash flows after tax. Use thereof determines the recoverable amounts
identical to those obtained by using pre-tax rates applied to non-taxable cash flows, in accordance with IAS 36.
Long-term growth rates
The rates applied to the main cash-generating units or groups thereof were as follows:
2012 2011
France 2.0% 2.0%
Great Britain 2.0% 2.0%
Denmark 2.0% 2.0%
Canada 2.0% 2.0%
Belgium 2.0% 2.0%
Other countries 2.0% 2.0%
Impairment tests of indefinite life assets have not led the Group to recognise any depreciation.