Edisun Power Europe Ltd. Corporate Governance Report 2010 ...

All amounts are in 000 CHF if not otherwise noted
Impairment Test for Goodwill
A segment-level summary of goodwill allocation is presented
below:
2010 2009
Switzerland 80 80
Germany 52 68
Total 132 148
The recoverable amount of a CGU is determined based on
value-in-use calculations. These calculations use cash
flow projections based on financial budgets approved by
management covering a four-year period. Cash flows beyond
the four-year period are extrapolated using the estimated
growth rates stated below. The key assumptions
used for value in use calculation are as follows:
Switzerland
WACC (before tax)
5.73% (2009: 5.31%)
Germany 5.97% (2009: 6.1%)
Consolidated Financial Statements
Debt financing is done either by issuing bonds or trough
project financing. In both cases the built photovoltaic
plants serve as a security, which has a positive impact on
the debt interest rate.
As of December 31, 2010, the impairment test did not indicate
that goodwill is impaired and no impairment
charge was recorded. The revenue growth rate of PV
plants under operation amounts to 0%.
The Group has also performed a sensitivity analysis.
Based on the business model, the main impact comes
from the discount rate. The WACC had accordingly been
amended such that the interest rate for borrowing has
increased and decreased of 0.5. No impairment was incurred
as a result of the test.
45