Siemens 2013 Annual Report Download - page 286

92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report

Siemens performs the mandatory annual impairment test in
the three months ended September . Except as disclosed
above, the recoverable amounts for the annual impairment
test  for Divisions or equivalents were estimated to be
higher than the carrying amounts. Key assumptions on which
management has based its determinations of the fair value
less costs to sell for the Divisions’ or equivalents’ carrying
amount include terminal value growth rates up to .% in fis-
cal  and .% in fiscal , respectively and after-tax dis-
count rates of .% to .% in fiscal  and .% to .% in
fiscal . Where possible, reference to market prices is made.
For the purpose of estimating the fair value less costs to sell of
the Divisions or equivalents, cash flows were projected for the
next five years based on past experience, actual operating re-
sults and management’s best estimate about future develop-
ments as well as market assumptions.
The fair value less costs to sell is mainly driven by the terminal
value which is particularly sensitive to changes in the assump-
tions on the terminal value growth rate and discount rate.
Both assumptions are determined individually for each Divi-
sion or equivalent. Discount rates reflect the current market
assessment of the risks specific to each Division or equivalent
and are based on the weighted average cost of capital for the
Divisions or equivalents (for SFS the discount rate represents
cost of equity). Terminal value growth rates take into consider-
ation external macroeconomic sources of data and industry
specific trends.
The following table presents the key assumptions used to de-
termine fair value less costs to sell for impairment test purpos-
es for the Divisions to which a significant amount of goodwill
is allocated:
Year ended September 30, 2013 Year ended September 30, 2012
Goodwill
Terminal value
growth rate
After-tax
discount rate Goodwill
Terminal value
growth rate
After-tax
discount rate
(in millions of €, rates in %)
Diagnostics of the Healthcare Sector 4,758 2.3% 6.0% 4,981 2.3% 7.0%
Industry Automation of the Industry Sector 2,986 1.7% 8.5% 2,897 1.8% 8.5%
Imaging & Therapy Systems of the Healthcare Sector 2,483 2.2% 7.5% 2,596 2.7% 7.0%
In the context of the ongoing disposal process, an impairment
test was performed for the logistics and airport solutions busi-
ness within the Mobility & Logistics Division of the Infrastruc-
ture & Cities Sector as of September , . As a result, an
impairment loss of € million was recognized.
In fiscal  the entire remaining goodwill of the solar busi-
ness amounting to € million was impaired upon classifica-
tion as held for disposal and discontinued operations based on
the measurement at its fair value less costs to sell. Due to the
reclassification of the solar business to continuing operations
in fiscal , the amount of € million is now disclosed as
impairment in continuing operations for fiscal .
NOTE  Other intangible assets
Gross
carrying
amount
as of
10/01/2012
Translation
differences
Additions
through
business
combina -
tions
Additions Retirements  Gross
carrying
amount
as of
9/30/2013
Accumulated
amortization
and
impairment
Carrying
amount
as of
9/30/2013
Amortization
and
impairment
in fiscal
2013 
(in millions of €)
Software and other
internally generated
intangible assets 3,270 (78) 2 265 (114) 3,346 (2,104) 1,241 (268)
Patents, licenses and
similar rights 7,154 (253) 1,363 65 (259) 8,070 (4,254) 3,816 (659)
Other intangible assets 10,424 (332) 1,365 330 (372) 11,415 (6,358) 5,057 (927)
1 Includes Other intangible assets reclassified to Assets
classified as held for disposal and dispositions of those
entities.
2 Includes impairment expenses of €53 million in fiscal
2013, thereof €25 million at Infrastructure & Cities, €19
million at Energy, €8 million at Industry and €2 million
at Healthcare.