Note 10 Intangible assets

             
  Group   Parent company
(SEK million) Capitalised expenses Patents and trademarks Licenses and beneficial rights Goodwill   Capitalised expenses
Acquisitions            
Opening balance 1 January 2007 104 504 822 2,291   53
Investments during the year 11 0 223 223    
Acquisitions through business combinations   30 37      
Divestment/retirement during the year -10          
Change in Group structure, reclassifications etc 16 -11 -76      
Translation differences 0 20 13 38    
Closing balance 31 December 2007 122 543 1,018 2,552   53
             
Opening balance 1 January 2008 122 543 1,018 2,552   53
Investments during the year 39 546 157      
Acquisitions through business combinations   30 0 5,508    
Divestment during the year -1   -603 -82    
Retirement during the year     -34      
Change in Group structure, reclassifications etc -53 0 -21 19    
Translation differences 1 108 39 943    
Closing balance 31 December 2008 107 1,227 556 8,940 53
             
Accumulated depreciation and amortisation            
Opening balance 1 January 2007 -75 -10 -470 -56   -51
Divestment/retirement during the year 2 0 0 -5    
Amortisation during the year -15 -2 -69 0   -1
Impairment losses     -13      
Change in Group structure, reclassifications etc -5 7 78      
Translation differences 0 -2 0      
Closing balance 31 December 2007 -94 -7 -473 -61   -52
             
Opening balance 1 January 2008 -94 -7 -473 -61   -52
Divestment during the year 1   289      
Retirement during the year     3      
Amortisation during the year -16 -5 -55     -1
Impairment losses -16     -76    
Change in Group structure, reclassifications etc 52 0 19      
Translation differences -1 -1 -4 -4    
Closing balance 31 December 2008 -73 -13 -221 -142   -53
             
Book value carried forward            
As 1 January 2007 29 494 352 2,235   2
As 31 December 2007 28 536 545 2,491   1
             
As 1 January 2008 28 536 545 2,491 1
As 31 December 2008 34 1,214 335 8,798 0
             
Depreciation by function (SEK million)       2008   2007
Cost of goods and services       33   85
Administrative expenses       41   14
Other operating expenses       1   0
Total       75   99
             
Impairment losses by function (SEK million)       2008   2007
Cost of goods and services       16   -
Other operating expenses       76   -
Total       93   -
             
Depreciation by function, parent company (SEK million)       2008   2007
Administrative expenses       -   1
Total       -   1
             
Impairment tests for cash-generating units containing goodwill
Major cash generating units with significant carrying amounts of goodwill are :
(SEK million)       2008   2007
TV1000       668   669
Prima Group       972   784
P4 Radio       458   494
Bulgaria       6,222   104
Subtotal       8,320   1,948
             
Other units       478   439
Total       8,798   2,491
             
The increase in goodwill in Prima Group and the increase between acquisition value and year-end regarding Nova, Bulgaria, as well as the decrease in goodwill in P4 Radio, are due to translation differences.
Impairment testing of the goodwill and other intangible assets with indefinite lives for cash-generating units in the business areas are based on calculations of the recoverable amount, and by use of a discounted cash flow model. The model involves among other factors terminal values, market growth rates, and working capital requirements. These cash flow projections calculated over a five year period are based on actual operating results, forecasts and financial projections, using historical trends, general market conditions, industry trends and other available information.
The cash flow projections are based on a sustainable growth rate which is individually estimated based on each unit's outlook. Individual assumptions are also made on cost and capital turnover development. The cash flow is discounted for each unit using an appropriate discount rate considerating the cost of capital and risk with individual consideration taken only in special circumstances.
Based on the assessments, the Board and the management concluded that the goodwill relating to the social network community Playahead had an impairment requirement of SEK 76 million in 2008. Playahead is reported in the Online business area.
Impairment losses are included in other operating expenses in the income statement.
             
Sensitivity
The Board and the management estimates that the units, which do not indicate an impairment requirement, have generally such a margin that reasonably possible adverse changes in individual parameters would not cause the value in use to fall below the book value. However, the major goodwill amount, SEK 6,222 million, comprise Bulgaria, including this year's aquisition of Nova. Given the new general economic environment, and the economic conditions in Bulgaria, the cash flow projections are more uncertain and may also be influenced by factors not in control by the company.
             

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