Annual Report 2009 - Von Roll

Financial Reporting 2009 – Consolidated Financial Statements 67Von Roll prepares cash flow forecasts derived from the most recent financial budget 2010 approved by the managementand the Board of Directors and extrapolates cash flows for 2011 to 2013 and following years based on the anticipatedgrowth rates for the business model. In setting the planning parameters, sufficient allowance was made forgrowth based on corporate targets and the difficult global economic conditions.19.| Goodwillin CHF 1,000Balance at 1 January 2008 10,686Additions 58,986Restatement purchase price allocation – 24,243Currency translation – 6,562Balance at 31 December 2008 (restated) 38,867Balance at 1 January 2009 38,867Additions 168Currency translation 897Balance at 31 December 2009 39,932The reduction in goodwill in financial year 2008 reflects the completion of the process to determine the fair valuesof identifiable assets, liabilities and contingent liabilities from the acquisition of Von Roll Transformers Ltd. and isdescribed in more detail in Note 2. The increase in financial year 2009 contains acquisition costs that can be allocatedto the purchase of Von Roll Transformers Ltd.In accordance with IFRS 3, goodwill is tested annually for impairment.The impairment tests have been determined using the discounted cash flow model, applying discount rates of 6.9 %to 11.4 %. The management estimates discount rates using rates that reflect current market assessments of the timevalue of money and the risks specific to the cash-generating units. An increase in the discount rates of 1 % would notlead to any further impairments.Von Roll prepares cash flow forecasts derived from the 2010 financial budget approved by the management and theBoard of Directors and extrapolates cash flows for 2011 to 2013 and the following years based on anticipated growthrates for the business model. In setting the planning parameters, sufficient allowance was made for growth basedon corporate targets and the difficult global economic conditions.Impairment tests in 2009 did not show any need for impairments. Goodwill is mainly allocated to John C. DolphCompany, Von Roll Austral Inc., Pearl Insulations Pvt. Ltd, Pearl Metal Products (Bangalore) Pvt. Ltd, the ShenzhenMica Group companies and Von Roll Transformers Ltd.