2.5 Goodwill and intangible assets with an indefinite useful life
| in CHF mn | 2022 | 2021 | ||
|---|---|---|---|---|
| Goodwill per business division | ||||
| TX Markets | 291.0 | 291.0 | ||
| Goldbach | 113.0 | 113.0 | ||
| 20 Minuten | 146.9 | 147.2 | ||
| Tamedia | 91.2 | 91.2 | ||
| Group & Ventures | 22.8 | 22.9 | ||
| Total | 664.8 | 665.2 |
In addition to goodwill, intangible assets (trademarks/domains) with indefinite useful lives are found in the following business divisions:
| in CHF mn | 2022 | 2021 | ||
|---|---|---|---|---|
| Intangible assets with indefinite useful lives per business segment | ||||
| TX Markets | 91.0 | 91.0 | ||
| Goldbach | 39.0 | 39.2 | ||
| 20 Minuten | 22.3 | 22.3 | ||
| Tamedia | – | – | ||
| Group & Ventures | 7.9 | 7.9 | ||
| Total | 160.2 | 160.3 | ||
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Goodwill of CHF 291.0 million and intangible assets with indefinite useful lives of CHF 91.0 million apply to the largest cash-generating unit JobCloud. These were tested for impairment on the basis of the value in use, growth rate calculation, discount rate and other assumptions in the TX Markets segment.
The goodwill and intangible assets with indefinite useful lives were tested for impairment for each cash-generating unit on 31 December 2022. The cash-generating units are determined at a level below the segments, provided they are largely independent of other assets. Their values in use were calculated using the discounted cash flow method.
The calculations on which the business plans are based refer to the values generated in the current year, the budget figures for 2023 and the medium-term expectations for each of the business divisions. The budget figures include the latest estimates relating to changes in revenues and costs. The estimates relating to the changes in revenues take into account external market data (WEMF, Media Focus) and are based on the current reader or user figures. Future changes in these numbers are forecast individually. The business plans take account of business risks with differing assessments. The business plans cover a period of four years.
The growth rates for the following years were applied as follows:
| 2022 | 2021 | |||
|---|---|---|---|---|
| Growth rates | ||||
| TX Markets | 1.1% | 1.0% | ||
| Goldbach | 1.1% | 0.6% | ||
| 20 Minuten | 1.1% | 0.0% | ||
| Tamedia | –0.8% | –4.8% | ||
| Group & Ventures | 1.1% | 1.0% |
In the case of cash-generating units with positive growth, it is assumed that they will achieve long-term growth rates in line with the predicted future rate of inflation. For cash-generating units with negative growth, it is assumed that the negative growth rate will slow over the long term.
The discount rates applied (WACC) are shown in the following table.
| 2022 | 2021 | |||
|---|---|---|---|---|
| WACC before tax | ||||
| TX Markets | 11.0% | 8.9% | ||
| Goldbach | 9.1–10.5% | 8.3–9.9% | ||
| 20 Minuten | 9.0–13.0% | 7.9–10.6% | ||
| Tamedia | 9.4% | 9.2% | ||
| Group & Ventures | 13.2–13.3% | 11.5–11.6% |
The impairment testing at the end of 2022 did not show any impairment was needed for any cash-generating units. The test is performed once a year in each case and in the event of any signs of potential impairment. Additional impairment of goodwill and intangible assets with an indefinite useful life could result in future from changes in the fundamental data used for impairment testing.
Impairment of goodwill and intangible assets with an indefinite useful life could result from changes in the fundamental data used for impairment testing, such as an ongoing deterioration in the gross margin or a change in cost structure. The possible impact was investigated by means of sensitivity analyses with regard to changes considered possible for a key assumption.
The analysis shows that in the event of a decrease in the EBIT margin for the planning years of 3.6 per cent (rather than 16.0 per cent), combined with a 1.9 per cent higher discount rate after tax or a 2.4 per cent lower growth rate after the period covered by the business plan, the achievable amount for the cash-generating unit Goldbach would correspond with the carrying amount, meaning that there would no longer be overfunding. The achievable amount exceeds the current carrying amount by CHF 95.6 million. For the Tamedia and Zattoo units, the analysis shows that in the event of a 1.3 per cent decrease in the EBIT margin for the planning years (rather than 4.6 per cent or 4.2 per cent respectively), there would no longer be overfunding. The achievable amount exceeds the current carrying amount by CHF 66.2 million and CHF 15.4 million respectively.
For the other units, the sensitivity analyses show that no reasonably possible change to the key assumptions would lead to the achievable amount being reduced to the amount of the corresponding carrying amount.
Significant judgements or estimates
The allocation of the goodwill to the cash-generating units and the calculation of the achievable amount is at the discretion of the Management. This includes the estimate of future expectations for the business areas (cash flows), and the calculation of the discount factor and the growth rate based on historic data and current predictions.
Accounting policies
At the time of initial consolidation, the assets and liabilities of a company – or the net assets acquired – and the contingent liabilities are measured at fair value. Any positive difference between the consideration paid and the acquired net assets calculated according to these policies is recognised as goodwill in the year of acquisition. The goodwill thus calculated is not amortised but is instead tested for impairment every year. If there is any indication of a possible goodwill impairment, its value is re-assessed and, if necessary, written off as an impairment. Any negative difference between the consideration paid and the net assets is recognised immediately in the income statement following a review.
In the event of disposal of consolidated companies, the difference between the sales price and other shares held, as well as transferred net assets, which could also include some remaining goodwill, is reported in the consolidated income statement as income from the sale of investments.
The position that a company or a product has within the market at the time a purchase agreement is entered into is reflected in the purchase price that is paid for this acquisition. This position is by definition not a separate component and therefore cannot be measured. It forms an integral component of the goodwill acquired.