Note 12 – Goodwill
Cash-generating units with goodwill
|Opening balance, January 1, 2021
|Ingående balans 2021-01-01
|Closing balance, December 31, 2021
|Utgående balans 2021-12-31
|Opening balance, January 1, 2022
|Ingående balans 2022-01-01
|Closing balance, December 31, 2022
|Utgående balans 2022-12-31
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 with an indefinite useful life is allocated to the Group’s cash-generating units identified per operating segment.
The recoverable amount for a cash generating unit has been determined based on calculations of value in use. These calculations are based on estimated future cash flows before tax based on financial budgets approved by Group management covering a five-year period. Cash flow beyond the five-year period is extrapolated using the estimated growth rate. The estimated growth rate has been assumed to correspond to the growth rate in the fifth year, which is estimated to be about 2 percent (2) for all operating segments. Assumptions have also been made regarding operating margins, overheads, working capital needs and investment needs. The parameters have been set to correspond to a growth rate of about 2-2.5 percent (2) per year for all operating segments. The pre-tax discount rate applied amounts to 13.6 percent (10.7) for all operating segments.
The calculation as per December 31, 2022 shows that the right of use value exceeds the carrying amount of all cash generating units and therefore there is no impairment requirement. Nor was there any impairment requirement for the calculation as per December 31, 2021.
A number of sensitivity analyses have been done where the variables included in the value-in-use model were changed and the effect on the recoverable amount was analyzed. Sensitivity analyses show that the residual goodwill for all cash generating units would continue to be justifiable if the discount rate were to be raised by 1 percentage point or the growth rate, terminal growth or operating margin would be reduced by 1 percentage point. The table above shows how goodwill is distributed per cash generating unit.