 Property and equipment
| |
Total |
Buildings and Land |
Fixtures, fittings and furniture |
Hardware |
Other property and equipment |
Cost |
|
|
|
|
|
Balance at 1 January 2004 |
230 |
25 |
122 |
74 |
9 |
Acquisitions/disposals of subsidiaries |
-7 |
-2 |
-5 |
|
|
Additions |
22 |
3 |
8 |
10 |
1 |
Disposals |
-12 |
-4 |
-5 |
-2 |
-1 |
Exchange differences |
-1 |
|
-1 |
-1 |
1 |
Balance at 1 January 2005 |
232 |
22 |
119 |
81 |
10 |
Additions |
28 |
7 |
12 |
8 |
1 |
Disposals |
-15 |
|
-9 |
-6 |
|
Exchange differences |
6 |
|
2 |
4 |
|
Balance at 31 December 2005 |
251 |
29 |
124 |
87 |
11 |
| |
|
|
|
|
|
Accumulated depreciation and
impairment losses |
|
|
|
|
|
Balance at 1 January 2004 |
-144 |
-12 |
-77 |
-53 |
-2 |
Depreciation for the year |
-31 |
-2 |
-16 |
-12 |
-1 |
Disposals |
11 |
1 |
9 |
|
1 |
Exchange differences |
- |
|
1 |
|
-1 |
Balance at 1 January 2005 |
-164 |
-13 |
-83 |
-65 |
-3 |
Depreciation for the year |
-27 |
-2 |
-13 |
-10 |
-2 |
Disposals |
12 |
-2 |
8 |
6 |
|
Exchange differences |
-2 |
-1 |
-1 |
|
|
Balance at 31 December 2005 |
-181 |
-18 |
-89 |
-69 |
-5 |
| |
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
At 1 January 2004 |
86 |
13 |
45 |
21 |
7 |
At 31 December 2004 |
68 |
9 |
36 |
16 |
7 |
At 31 December 2005 |
70 |
11 |
35 |
18 |
6 | 
 Intangible assets
| |
Total |
Goodwill |
Software |
Cost |
|
|
|
Balance at 1 January 2004 |
887 |
812 |
75 |
Acquisition of subsidiaries |
20 |
20 |
|
Disposals of subsidiaries |
-16 |
-16 |
|
Additions |
10 |
|
10 |
Disposals |
-2 |
|
-2 |
Exchange differences |
-26 |
-24 |
-2 |
Balance at 1 January 2005 |
873 |
792 |
81 |
Acquisition of subsidiaries |
48 |
47 |
1 |
Additions |
9 |
|
9 |
Exchange differences |
53 |
50 |
3 |
Balance at 31 December 2005 |
983 |
889 |
94 |
| |
|
|
|
Accumulated amortisation and
impairment losses |
|
|
|
Balance at 1 January 2004 |
-45 |
|
-45 |
Amortisation for the year |
-13 |
|
-13 |
Disposal of subsidiaries |
5 |
|
5 |
Exchange differences |
2 |
|
2 |
Balance at 1 January 2005 |
-51 |
|
-51 |
Amortisation for the year |
-10 |
|
-10 |
Impairment |
-5 |
|
-5 |
Exchange differences |
-5 |
|
-5 |
Balance at 31 December 2005 |
-71 |
|
-71 |
| |
|
|
|
Carrying amounts |
|
|
|
At 1 January 2004 |
842 |
812 |
30 |
At 31 December 2004 |
822 |
792 |
30 |
At 31 December 2005 |
912 |
889 |
23 | Intangible assets consist of goodwill and software. The software included under intangible assets is computer software which is not an integral part of the related hardware. Computer software which is an integral part of the hardware is classified as Hardware under Property and equipment. Amortisation of intangible assets, other than goodwill, and any impairment losses are recognised in Operating expenses in the Income Statement. Impairment tests
The carrying amount of goodwill is allocated to reporting segments as follows:
| |
2005 |
2004 |
| |
|
|
France |
39 |
39 |
UK |
336 |
317 |
USA |
274 |
212 |
Netherlands |
53 |
53 |
Rest of Europe |
58 |
54 |
Rest of World |
129 |
117 |
Total |
889 |
792 | Vedior tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.Impairment is tested based on the cash flow projections for the specific cash generating units using the budget for the year 2006 and forecasts for the following 4 years. Key assumptions are those regarding the discount rates, growth rates and expected changes to sales, gross margin and expenses during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the cash generating unit. The growth rates are based on industry growth forecasts. Changes in sales and direct costs are based on past practices and expectations of future changes in the market. The rate used to discount the forecasted cash flows varies by geography from 9.0% to 16.5%. |