ANNUAL REPORT 2011 - DONG Energy

DKK million Goodwill
Cost at 1 January 2010 663 3,163 597 827 144 5,394
Foreign exchange adjustments 1 - 29 - - 30
Adjustments relating to acquisition of enterprises (13) - - - - (13)
Additions - - 384 6 131 521
Disposals - (4) (187) (34) (7) (232)
Transfers - 39 - 196 (235) 0
Reclassifi cations - - (347) - (12) (359)
Cost at 31 December 2010 651 3,198 476 995 21 5,341
Amortisation and impairment losses
at 1 January 2010 - (1,474) (186) (582) - (2,242)
Foreign exchange adjustments - - - 1 - 1
Amortisation, disposals - - 187 29 - 216
Amortisation charge - (184) (202) (86) - (472)
Impairment charge - - (93) - - (93)
amortisation and impairment losses
at 31 December 2010 0 (1,658) (294) (638) 0 (2,590)
Carrying amount at 31 December 2010 651 1,540 182 357 21 2,751
Impairment testing
Goodwill and in-process development projects are tested for
impairment annually. The carrying amounts of rights, CO2 emissions allowances and completed development projects
are assessed annually to determine whether there is any indication
of impairment. If any such indication exists, an impairment
test is carried out.
In an impairment test, the asset’s recoverable amount is
compared with its carrying amount. An impairment loss is recognised
whenever the carrying amount of an asset or its cashgenerating
unit (CGU) exceeds its recoverable amount.
The recoverable amount of an intangible asset is the higher
of its fair value less expected disposal costs and the present
value of the expected future net cash fl ows (value in use).
Goodwill
Testing for impairment is carried out for the business areas or
activities that represent the lowest level of CGUs to which the
carrying amount of goodwill can be allocated on a reasonable
and consistent basis.
Rights
CO2 emissions
allowances
Completed development
projects
In-process development
projects
total
Acquired enterprises are established either as new activities or
are integrated as quickly as possible with existing activities to
utilise potential synergies. For acquisitions that are not established
as separate activities the implication of this is that, after
a short time, it will no longer be possible to allocate the carrying
amount of goodwill to the acquirees on a reasonable and
consistent basis, and it will therefore no longer be possible to
test goodwill from each acquisition for impairment.
The recoverable amount of CGUs is determined as a value in
use, where net cash fl ows are determined on the basis of business
plans and budgets that have been approved by management.
For some CGUs, value in use is determined on the basis
of a defi nite period of years, while, for other CGUs, a terminal
value after the budget period is determined based on the general
growth outlook for the relevant markets. Net cash fl ows
have been discounted using a discount rate before tax that
refl ects the cost of capital associated with the activity.
The goodwill allocation for each CGU and signifi cant assumptions
applied in connection with the impairment tests carried
out are set out below:
DONG ENERGY DONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDatED finanCial statEmEnts
89 85
notes