116770 Project Obelix Pt1.qxp - Carlsberg Group

Carlsberg Breweries GroupNotes16 Impairment testGoodwill and trademarks with an indefinite useful lifeThe Carlsberg Breweries Group performs impairment tests for the Group’s cash-generating units. The cash-generating units are basedon the management structure. Internal financial control is generally carried out at country level. Impairment test of goodwill is performedat country level and not segment level.Trademarks are impairment-tested at Group level, as royalty income is earned globally across segments.For the Group's cash-generating units at segment level, the carrying amount of goodwill and trademarks with an indefinite useful life at31 December was as follows:2007DKK millionGoodwill Trademarks 1 Total %Western Europe 4,159 654 4,813 51%BBH Group (50%) 1,999 - 1,999 21%Eastern Europe excl. BBH 1,190 - 1,190 13%Asia 1,391 - 1,391 15%Total 8,739 654 9,393 100%2006DKK millionGoodwill Trademarks 1 Total %Western Europe 4,195 652 4,847 52%BBH Group (50%) 1,946 - 1,946 21%Eastern Europe excl. BBH 1,143 2 1,145 12%Asia 1,444 - 1,444 15%Total 8,728 654 9,382 100%1 The trademark is allocated to the segment that owns the trademark. Royalty income generated by the trademark is earned globally andacross segments.General assumptionsAt 31 December 2007 no goodwill was associated with cash-generating units comprising 10% or more of the total carrying amount ofgoodwill and trademarks with an indefinite useful life.The Carlsberg Breweries Group performed impairment tests of the carrying amount of goodwill and trademarks with an indefinite usefullife at 31 December 2007. Impairment tests are performed in the 4th quarter each year based on the budgets and business plansapproved by the Board of Directors and the Executive Board and other assumptions.TrademarksTrademarks are impairment-tested at Group level. The impairment test is based on expected future free cash flows primarily from theroyalty income generated by the individual trademark. Key assumptions include royalty rate, useful life and a theoretically calculated taxeffect. A post-tax discount rate is used which reflects the risk-free interest rate with the addition of specific and estimated future risksassociated with the particular trademark.The impairment test of trademarks is based on a comparison of the recoverable amount, corresponding to the discounted value of theexpected future free cash flow, with the carrying amount of the individual trademark.F-115