Note 12 – Goodwill
Cash-generating units with goodwill
|Opening balance, January 1, 2019||Ingående balans 2019-01-01||314||249||563|
|Closing balance, December 31, 2019||Utgående balans 2019-12-31||314||252||566|
|Opening balance, January 1, 2020||Ingående balans 2020-01-01||314||252||566|
|Closing balance, December 31, 2020||Utgående balans 2020-12-31||314||243||557|
Cash generating units
The cash generating unit Sweden consists of the company BE Group Sverige AB, which is part of business area Sweden & Poland. The Finland cash generating unit consists of the company BE Group Oy Ab, which is a part of business area Finland & Baltics.
Goodwill is tested for impairment at least once annually. This testing compares the recoverable amount with the carrying amount. Impairment testing was updated at December 31 and no impairment requirement in other cash-generating units was identified.
The recoverable amount of the cash generating units is determined by calculating their value in use. The recoverable amount has been determined using a value in use based on cash flow forecasts for five years forward and an end value based on an annual rate of growth of two percent, which is deemed to correspond to inflation. For the calculation of value in use, a discount rate has been calculated based on the weighted average cost of capital (WACC), which for the year amounted to 10.7 percent (10.8) before tax.
A number of sensitivity analyzes have been done where the variables included in the value-in-use model were changed and the effect on the recoverable amount was analysed. For the forecasted cash flow, growth, operating margin, working capital tied-up and investments are important factors. For the valuation, the discount rate is also an important parameter. The analyzes have focused on a deterioration of the average growth rate or operating margin by one percentage point or that the discount rate has been increased by one percentage point. The analyses have not indicated any impairment requirements, but rather that the value in use exceeds the book value for both of the cash generating units.