Note 10 Intangible assets

             
  Group   Parent company
(SEK million) Capitalised expenditure Patents and trademarks Licenses and beneficial rights Goodwill   Capitalised expenditure
Acquisitions            
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
             
Opening balance 1 January 2009 107 1,227 556 8,940 53
Investments during the year 14 0 2      
Acquisitions through business combinations       6    
Retirement during the year -9          
Change in Group structure, reclassifications etc -4 0 0 37    
Translation differences 0 -22 -13 -403    
Closing balance 31 December 2009 108 1,205 546 8,581 53
             
Accumulated amortisation and impairment losses            
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
             
Opening balance 1 January 2009 -73 -13 -221 -142 -53
Retirement during the year 10   0      
Amortisation during the year -6 -8 -91     0
Impairment losses during the year -2 -35 -4 -3,252    
Change in Group structure, reclassifications etc 2 0 0 -54    
Translation differences 0 1 5 106    
Closing balance 31 December 2009 -69 -55 -312 -3,342   -53
             
Book value carried forward            
As per 1 January 2008 28 536 546 2,491 1
As per 31 December 2008 34 1,214 335 8,798 0
             
As per 1 January 2009 34 1,214 335 8,798 0
As per 31 December 2009 39 1,151 233 5,239 0
             
Only external expenditure have been capitalised.
             
Amortisation by function (SEK million)       2009   2008
Cost of goods and services       56   33
Administrative expenses       48   41
Other operating expenses       0   1
Total       105   75
             
Impairment losses by function (SEK million)       2009   2008
Cost of goods and services       1   16
Other operating expenses       3,293   76
Total       3,294   92
             
Amortisation by function, parent company (SEK million)       2009   2008
Administrative expenses       0   -
Total       0   -
             
Impairment tests for cash-generating units containing goodwill
Major cash generating units with significant carrying amounts of goodwill are:
(SEK million)       2009   2008
TV1000       663   668
Prima Group       927   972
P4 Radio       516   458
Bulgaria       2,783   6,222
Subtotal       4,888   8,320
             
Other units       351   478
Total       5,239   8,798
             
The decrease in goodwill in Prima Group and TV1000, as well as the increase in goodwill in P4 Radio, are due to translation differences.
Impairment testing
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 considering the cost of capital and risk with individual consideration taken only in special circumstances.
Impairments
Based on the above assessments, the Board and the management concluded that the goodwill and other intangibles relating to Bulgaria, Slovenia and the social network community Playahead had an impairment requirement of SEK 3,151 million, SEK 120 million and 30 million in 2009 respectively. The impairment in other intangibles relate to Playahead. Bulgaria and Slovenia are reported in the Free-TV Emerging Markets segment and Playahead in the Online segment. In 2008, impairment of the goodwill related to Playahead resulted in a write-down of SEK 76 million. The write-downs are due to the deterioration in the economic and financial climate and the prevailing advertising market conditions in Bulgaria and Slovenia. As for the Playahead business, the impairment is due to the declining number of users. The goodwill and other intangible assets are calculated at net present value-in-use, as described above. The discount rate used when calculating the recoverable amount related to Bulgaria was 12%.
Impairment losses in goodwill are included in other operating expenses in the income statement.
             
Sensitivity
The units, which do not indicate an impairment requirement, generally have 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 cash flow projections are more uncertain and may also be influenced by factors not in control by the company.

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