APC 2007 Annual Report Download - page 119
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5
Consolidated financial statements at December 31, 2007
4.2 - Changes in goodwill
The main movements between December 31, 2006 and December 31, 2007 are summarized in the following table:
2007 2006
Net goodwill at opening 6,185.7 5,878.8
Acquisitions 2,885.2* 727.7*
Disposals (221.0) (1.5)
Impairment --
Translation adjustment (660.3) (323.8)
Reclassifications (48.4) (95.5)
Net goodwill at year end 8,141.2 6,185.7
Cumulative impairment (8.4) (8.4)
*On the basis of the exchange rate on the acquisition date.
Acquisitions
Acquisitions during the year primarily included APC and
Pelco in North America.
Application of purchase accounting to the APC acquisition
led primarily to the recognition of intangible assets of
$2,562 million (1,950 million), of which $1,839 million
(1,400 million) for the trademark, $633 million (482 mil-
lion) for customer lists and $90 million (68 million) for
technology. Details of the acquired assets and liabilities are
provided in note 3.1.
The value of Pelco goodwill has been based on a provi-
sional allocation of the acquisition cost due to the limited
amount of time between the acquisition date and the bal-
ance sheet date. This provisional accounting led primarily
to the recognition of intangible assets of $823 million
(582 million), of which around $507 million (358 million)
for trademarks and $274 million (174 million) for cus-
tomer lists. The Group has a period of 12 months from the
acquisition date to finalize the purchase accounting. De-
tails of the acquired assets and liabilities are provided in
note 3.1.
Other changes
On October 31, 2007, the Group finalized the divestment
of MGE UPS’s small systems (less than 10 kVA) to Eaton
Corp. leading to the write-off of the related goodwill.
Impairment tests did not reveal any losses on goodwill rec-
ognized in the balance sheet.
The main exchange rate fluctuations concerned goodwill in
US dollars.
(A) Square D, Telemecanique and Merlin Gerin goodwill has been allocated on the basis of operating profit by region as
of the acquisition date.
Europe North Asia-Pacific Rest of
America the world
Square D 9 % 80 % 10 % 1 %
Telemecanique 71 % 0 % 20 % 9 %
Merlin Gerin 62 % 10 % 20 % 8 %
117