Siemens 2007 Annual Report Download - page 244

244 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
In fi scal 2007, the net increase in goodwill was €2,812. The increase of €5,062
related to acquisitions and purchase accounting adjustments was offset by €(634)
primarily for U.S.$. currency translation adjustments, €(60) impairment relating
to Other Operations (see also Note 6), dispositions of €(38) and €(1,518) of good-
will formerly at SV that was reclassifi ed as part of Assets classifi ed as held for dis-
posal. Acquisitions and purchase accounting adjustments related primarily to
Med’s acquisition of the diagnostics division of Bayer and A&D’s acquisition of
UGS, as well as to a PG acquisition. For further information on acquisitions, dispo-
sitions and discontinued operations see Note 4.
In fi scal 2006, the net increase in goodwill was €868. The increase of €1,415
related to acquisitions and purchase accounting adjustments was offset by €(178)
primarily for U.S.$ currency translation differences and €(369) of goodwill for-
merly at Com that was reclassifi ed as part of Assets classifi ed as held for disposal.
Med’s acquisition of DPC increased goodwill by €751. For further information on
acquisitions, dispositions and discontinued operations see Note 4. No goodwill
was impaired or written off in fi scal 2006.
Siemens tests at least annually whether goodwill suffered any impairment, in
accordance with the accounting policy stated in Note 2. Key assumptions on which
management has based its determinations of the recoverable amount for the divi-
sions carrying goodwill include growth rates up to 3.5% and after-tax discount
rates of 7.5% to 10%. Where possible, reference to market prices is made.
Within the Operations Groups the following divisions are allocated a sig-
nifi cant amount of goodwill: Siemens Medical Solutions Diagnostics division
within Med €3,331 (2006: €750), Industrial Automation Systems division within
A&D €1,154 (2006: €114) and Industrial Applications division within PG €800
(2006: €658).