ANNUAL REPORT 2008 | 2009 - SinnerSchrader AG

Consolidated Financial Statements of SinnerSchrader AGNotes634.1.1 GoodwillThe goodwill in the amount of € 3,135,000 posted to the balance sheet as of 31 August 2009 arose from theacquisition of the spot-media group in the 2007/2008 financial year and the acquisition of the newtention groupin the 2008/2009 financial year.In accordance with IFRS 3.74, the book values developed as follows: In the 2008/2009 financial year, the goodwillincreased by a total of € 542,000. Goodwill in the amount of € 343,000 was identified in the context of thepurchase price allocation for the acquisition of the newtention group and included in the Consolidated BalanceSheets in the course of the first consolidation.The goodwill from the acquisition of the spot-media group was raised in the amount of the remaining € 199,000.In the course of determining the amount of the first of four earn-out payments in January 2009, the expectedamount of the entire earn-out payments to be made in the years 2009 to 2012 was adjusted upwards due to thedevelopment of the spot-media group, which was better than planned.The goodwill was assigned to the respective cash-generating units in accordance with the field of activity ofthe acquired companies. The goodwill from the acquisition of the spot-media group is to be assigned to theInteractive Marketing segment, while the goodwill from the acquisition of the newtention group is to be assignedto the Interactive Media segment.The value of the goodwill as of 31 August 2009 was confirmed in impairment tests. These were carried out onthe level of the cash-generating units, which corresponded to the respective sub-groups below the segmentlevel, following the Discounted Cash Flow (DCF) method on the basis of three-year business plans approvedby the management for the respective units.The key parameters in the use of the DCF method are the discount rate and the long-term growth rate for thecalculation of the perpetual annuity. The weighted average cost of capital (WACC) of the respective unit aftertaxes was used as the discount rate. For both evaluation units, a risk-free basic interest rate of 4.25 %, a marketrisk premium of 5 %, and a beta factor of 1.27 were used, which results in a weighted average cost of capitalafter taxes of 10.6 %. A long-term growth rate of 0.5 % was assumed.In the 2008/2009 financial year, assumptions relating to macroeconomic developments, e.g. discount interestrates, were in part very volatile. Based on what was known of and expected from the market and competitiveenvironment as of the report date, values arose for the cash-generating units which showed absolutely noindication of a need for impairment.4.1.2 Other Intangible AssetsAs of 31 August 2009, the balance sheet of the SinnerSchrader Group showed intangible assets with a bookvalue of € 1,704,000 compared to a book value of € 437,000 at the end of the previous financial year. In thecourse of the financial year, intangible assets with procurement costs of a total of € 1,857,000 were acquired.€ 1,402,000 arose in the course of the first consolidation of the newtention group as of 1 December 2008, with€ 1,400,000 of this arising for the n7 software developed and marketed by newtention technologies GmbH.The usage period for the n7 software was set at four years, so that depreciation of the software amounting to€ 263,000 arose in the 2008/2009 financial year.