Siemens 2014 Annual Report Download - page 275

247 D. Consolidated Financial Statements 337 E. Additional Information
248 D. Consolidated Statements of Income
249 D. Consolidated Statements of Comprehensive Income
250 D. Consolidated Statements of Financial Position
251 D. Consolidated Statements of Cash Flows
252 D. Consolidated Statements of Changes in Equity
254 D. Notes to Consolidated Financial Statements
330 D. Supervisory Board and Managing Board

Siemens performs the mandatory annual impairment test
in the three months ended September . The recoverable
amounts for the annual impairment test  for Divisions or
equivalents were generally 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 ter-
minal value growth rates up to . % in fiscal  and . % in
fiscal , respectively and after-tax discount rates of . % to
. % in fiscal  and . % to . % in fiscal . Where pos-
sible, 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
results and management’s best estimate about future develop-
ments as well as market assumptions. The determined fair
value of the Divisions or equivalents is assigned to level  of
the fair value hierarchy.
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 Division or
equivalent. Discount rates reflect the current market assess-
ment 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 consideration
external macroeconomic sources of data and industry
specific trends.
The following table presents the key assumptions used to
determine fair value less costs to sell for impairment test
purposes for the Divisions to which a significant amount of
goodwill is allocated:
Year ended September ,  Year ended September , 
Goodwill Terminal value
growth rate
After-tax discount
rate
Goodwill Terminal value
growth rate
After-tax discount
rate
(in millions of €)
Diagnostics of the Healthcare Sector 4,765 2.4 % 6.5 % 4,758 2.3 % 6.0 %
Industry Automation of the Industry Sector 3,105 1.7 % 8.5 % 2,986 1.7 % 8.5 %
Imaging & Therapy Systems of the Healthcare Sector 2,603 2.2 % 7.5 % 2,483 2.2 % 7.5 %
In fiscal , an impairment loss of €  million resulted from
the logistics and airport solutions business of the Mobility &
Logistics Division of the Infrastructure & Cities Sector.
NOTE  Other intangible assets
Gross carrying
amount as of
//
Translation
differences
Additions
through
business
combinations
Additions Retirements  Gross carrying
amount as of
//
Accumulated
amortization
and
impairment
Carrying
amount as of
//
Amortization
and impair-
ment in fiscal

(in millions of €)
Software and other internally
generated intangible assets 3,346 111 – 312 (1,019) 2,750 (1,526) 1,224 (183)
Patents, licenses
and similar rights 8,070 277 21 78 (370) 8,077 (4,741) 3,336 (558)
Other intangible assets 11,415 388 21 390 (1,389) 10,826 (6,266) 4,560 (741)
1 Includes Other intangible assets reclassified to Assets
classified as held for disposal and dispositions of those
entities.