259
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 10. Goodwill
Goodwill impairment test
In 2013, Vivendi tested the value of goodwill allocated to its cash-
generating units (CGUs) or groups of CGU applying valuation methods
consistent with previous years. Vivendi ensured that the recoverable
amount of CGU or groups of CGU exceeded their carrying value
(including goodwill). The recoverable amount is determined as the
higher of the value in use determined by the discounted value of future
cash flows (discounted cash flow method (DCF)) and the fair value (less
costs to sell), determined on the basis of market data (stock market
prices, comparable listed companies, comparison with the value
attributed to similar assets or companies in recent transactions). For
a description of the methods used for the impairment test, please refer
to Note 1.3.5.7.
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Presentation of CGU or groups of CGUs tested
Operating Segments
Cash Generating Units (CGU)
CGU or groups of CGU tested
Canal+ Group
Pay-TV in Metropolitan France
Canal+ France
Canal+ Overseas
Free-to-air TV
(a)
Free-to-air TV
(a)
Studiocanal
Studiocanal
Other entities
Other entities
Universal Music Group
Recorded music (including EMI
(b)
)
Universal Music Group
Artist services and merchandising
Music publishing
GVT
GVT
GVT
SFR
SFR
SFR
(a)
As of December 31, 2012, no goodwill impairment test regarding Canal+ Group’s Free-to-air TV was undertaken given that the date of acquisition
of D8/D17 was close to the closing date, and considering that no triggering event had occurred between those dates.
(b)
As of December 31, 2012, no goodwill impairment test regarding EMI Recorded Music was undertaken given that the date of acquisition of
EMI Recorded Music by UMG (please refer to Note 2.3) was close to the closing date, and considering that no triggering event had occurred
between those dates. In 2013, EMI Recorded Music’s operations were integrated with UMG’s recorded music operations. Consequently,
as of December 31, 2013, Vivendi undertook a goodwill impairment test regarding UMG, including henceforth EMI Recorded Music’s goodwill.
During the fourth quarter of 2013, Vivendi performed such test on each
cash generating unit (CGU) or groups of CGU, on the basis of valuations
of recoverable amounts determined with the assistance of third-party
appraisers for SFR, Canal+ France, and Universal Music Group; and
internal valuations notably for GVT, Studiocanal, and Free-to-air TV.
As a result, Vivendi Management concluded that, except in the case
of SFR, the recoverable amount of each CGU or groups of CGU tested
exceeded their carrying value as of December 31, 2013.
SFR:
as of December 31, 2013, Vivendi examined the value of
SFR’s goodwill. SFR’s recoverable amount was determined upon
the basis of the usual valuation methods, in particular the value
in use, based upon the DCF method. The most recent cash flow
forecasts, and financial assumptions approved by the Management
of the group were used and were updated to take into account the
strong impact on revenues of the new tariff policies decided by SFR
in a competitive environment, partially offset by cost savings which
were consistent with expectations under SFR’s transformation
plan, while maintaining high capital expenditures, notably due to
SFR’s acceleration of very-high speed mobile network investments.
As a result, Vivendi’s Management concluded that SFR’s recoverable
amount was below its carrying value as of December 31, 2013 and
decided to record a goodwill impairment loss of €2,431 million
(please refer to tables below).
As a reminder, as of December 31, 2012, Vivendi examined the value
of SFR’s goodwill, upon the basis of the usual valuation methods,
and concluded that SFR’s recoverable amount, based upon the DCF
method, despite its decline, exceeded its carrying value at that date.
Canal+ France:
as of December 31, 2013, Vivendi examined
the value of Canal+ France’s goodwill, using the usual valuation
methods and concluded that Canal+ France’s recoverable amount,
based upon the DCF method, using the most recent cash flow
forecasts approved by the Management of the group, exceeded its
carrying value at that date. As a reminder, since November 5, 2013,
Vivendi holds a 100% interest in Canal+ France pursuant to the
acquisition of Lagardère Group’s 20% interest in Canal+ France for
€1,020 million, in cash. In accordance with IFRS 10, this transaction
was recognized as the acquisition of a non-controlling interest and
the difference between the consideration paid and the carrying
value of the acquired non-controlling interest was recorded as a
deduction from equity attributable to Vivendi SA shareowners
(please refer to Note 2.2).
As a reminder, as of December 31, 2012, Canal+ France’s
recoverable amount was determined upon the basis of the value
in use based on the DCF method, using the most recent cash flow
forecasts approved by the Management of the group, as well as
financial assumptions consistent with previous years (please refer
