Annual report 2010 - Dexia.com

Notes to the consolidated financial statementsManagement reportConsolidatedfinancial statementsPositive goodwill31/12/09 31/12/10(amounts larger than EUR 100 mios)DenizBank 1,125 1,173Group RBC Dexia 171 203Crediop 131 131DIS 104 104The evaluation of the recoverable amount of a cash-generatingunit (CGU) requires incorporating the cash outflows associatedwith the funding. Because the capital deployed is managedon group basis, the Economic Equity allocated to a CGUrepresents the net assets generating the margin. The carryingamount of the CGU is therefore the economic equity plus theallocated goodwill.If a subsidiary is only active on a single CGU, the entiregoodwill is allocated to this CGU. If a subsidiary is activeon several CGU's, the goodwill is allocated to CGU's basedon the cash flows attributable to each one at the date ofacquisition. If one activity is highly integrated, a CGU mayinclude several legal entities or related CGU from differentlegal entities (Asset management is considered as one CGU,as well as Investor services)Impairment on goodwill under IAS 36 is recognised inprofit or loss if the recoverable amount of an investmentis lower than its carrying value. The recoverable amount isdefined as the higher of the value in use (calculated basedon discounted cash flow - DCF - analysis) and the fair value(transaction multiples for comparable businesses, share pricedata for listed companies with comparable businesses) lesscosts to sell.The DCF method is based on a number of assumptions interms of future revenues and expenses for each businessunit. These parameters are based on financial planning asapproved by management, extrapolated over a sustainablegrowth period and then in perpetuity based on long termgrowth rates thereafter.The tests take into account the cost of capital based on arisk-free rate plus risk premium specific to the CGU. The keyparameters which are sensitive to the assumptions made aretherefore the cost/income ratio, the long term growth rateand the cost of capital.The test did not result in any impairment on goodwill for anyof the Cash-Generating Units.Additional information Annual financial statements7.11. Tax assets31/12/09 31/12/10Current taxes 200 136Deferred tax assets (see note 9.2.) 2,718 2,710Total 2,919 2,847Deferred tax assets (DTA) are constituted for an amount ofEUR 2.03 billion (1.95 billion in 2009) by DTA coming fromnegative Available-for-sale reserve on bonds and “frozen“ fairvalue adjustment of financial assets reclassified to Loans andReceivables and by DTA on cash flow hedges reserves for EUR0.13 billion (0.15 billion in 2009).Apart from this, it relates to other elements includingrecoverable tax losses and provisions.160 Dexia Annual report 2010