Financial Statements 2009 - Manutencoop

7. ImpaIrment testInG of recorded GoodWIllduring 2009, group management completed major work on the reorganisation of the entire group,following the substantial acquisitions made at the end of 2008 including, in particular, the acquisitionof the altair group (formerly the pirelli & C. re integrated facility management group).this significant reorganisation has involved all lines of business and all corporate functions with a viewto maximising, as early as possible, the synergies released by the recent acquisitions.this new configuration reflects the more evolved vision of the business adopted by the managementof the mfm group, which envisages the offer of an increasingly complete range of services, no longertied to specific companies or business units.the process of reducing the number of legal entities via business combinations, consistent with thebusiness model adopted, and the objective of managing and monitoring the services offered withoutregard for the legal entity concerned, have resulted in the definition of Cgus that are no longer legalentitybased.specifically, this reorganisation has involved:> the absorption by manutencoop facility management s.p.a., from 1 January 2010, of altair ifms.p.a., gestin facility s.p.a., integra fm b.V. and teckal s.p.a.;> the absorption by mp facility s.p.a., from 1 January 2010, of mCb s.p.a.;> the formation of ma.Co. s.p.a. on 12 november 2009, and the subsequent contribution to thiscompany of mfm’s building sector line of business;> identification of the “project and energy” line of business, ahead of a possible spin-off during 2010;> centralisation within mfm post merger, from 1 January 2010, of various functions, such as: “sales,development and technical sales”, certain business support functions and strategy and control functions.this business reorganisation has been reflected by changes in management control, with the identificationof three strategic business areas (asa).the following asa have been identified:asa – facility managementthis asa includes:1. mfm, altair ifm s.p.a., gestin facility s.p.a., integra b.V. (holding company for the altair subgroup)and teckal s.p.a. except for the project and energy sector;2. mp facility s.p.a. and mCb s.p.a., together representing the new, mp facility s.p.a. following itsabsorption of mCb s.p.a. with effect from 1 January 2010;3. altair france s.a. and gestin polska sp.zo.o., companies operating in the facility management sectorabroad;4. mia s.p.a., smail s.p.a. and the group reporting to gruppo sicura s.r.l., operating in the facilitymanagement sector as suppliers of specialist services;5. other smaller companies operating in the facility management sector.asa - laundering & sterilisationthis asa essentially comprises servizi ospedalieri s.p.a. following its absorption of omasa s.p.a. witheffect from 1 July 2009. the two companies, both active in the laundering of linens for hospitals andthe sterilisation of linens and surgical instruments, were already grouped in the same Cgu throughout2009 despite being two separate legal entities.asa – other activitiesthis asa includes:1. the project & energy sector, comprising project management activities and the construction of cogenerationplant and solar power installations, principally by altair s.p.a. which was absorbed bymfm with effect from 1 January 2010;2. manutencoop Costruzioni s.p.a., a new company to which the group’s building line of businesshas been contributed.With regard to the proper final ppa for the acquisitions made at the end of 2009, mfm decided thatthe Cgus used for impairment testing purposes should also reflect, consistent with the reference accountingstandards, the asa structure described above.this allocation to Cgus is in fact fully consistent with the way Cgus are defined in ias 36, which requiresthe calculations used when performing impairment tests to be consistent with the reports usedby key decision makers when monitoring business performance and determining future developmentpolicies.the carrying amounts of the goodwill reported in the consolidated financial statements as of 31 december2009 are compared below with the related values as of 31 december 2008, as restated to takeaccount of the final allocation of the purchase price paid for integra ifm bV (see note 3 in this regard)and the aggregation of the Cgus, previously mainly defined by legal entity, into the asas describedabove:arrYInG amount of consolIdated GoodWIll(in thousands of Euro) 31 december 2009 31 december 2008restatedgoodwill allocated to the facility management Cgu 370,224 341,728goodwill allocated to the laundering/sterilisation Cgu 12,810 12,810goodwill allocated to the other Cgu 1,871 1,871total GoodWIll 384,905 356,409goodwill is subjected to impairment testing on an annual basis.impairment is tested by comparing the carrying amounts reported in the consolidated financial statementsfor the individual Cgus with their value in use, determined by discounting their expected cashflows over a reasonable period (not exceeding four years). these cash flows are taken from the businessplans prepared by senior management and approved by the board of directors of the parent Company.Where possible, to assist with impairment testing, the carrying amount of the Cgus has been comparedwith their fair values estimated with reference to the implicit multiples of competitors listed onregulated markets, and the multiples implicit in recent transactions involved companies operating inthe same business sector.the business plans used for the analyses described in this note were revised in december 2009 andapproved by the management board of mfm s.p.a. on 22 december 2009.the prudent assumptions made include steady growth (of between 0% and 2%, being lower than thegrowth rates forecast by external observers and the average growth in revenues from group activitiesgenerated by the various group companies in recent years) in the cash flows for the periods subsequentto those for which specific estimates are available.164 - Consolidated finanCial statements as of 31 deCember 2009 - aCCounting poliCies and explanatory notes Consolidated finanCial statements as of 31 deCember 2009 - aCCounting poliCies and explanatory notes - 165