Vodafone 2010 Annual Report Download - page 96

94 Vodafone Group Plc Annual Report 2010
Notes to the consolidated nancial statements continued
10. Impairment continued
The tables below show the key assumptions used in the value in use calculation and, for India, Turkey, Germany, Ghana, Greece, Ireland, Italy, Portugal, Romania, Spain and
the UK, the amount by which each key assumption must change in isolation in order for the estimated recoverable amount to be equal to its carrying value.
Assumptions used in value in use calculation
India Turkey Germany Ghana Greece Ireland Italy Portugal Romania Spain UK
% % % % % % % % % % %
Pre-tax adjusted
discount rate 13.8 17.6 8.9 24.4 12.1 9.8 11.5 10.6 11.5 10.2 9.6
Long-term growth rate 6.3 7.7 1.0 5.2 1.0 1.0 – 0.5 2.1 1.5 1.5
Budgeted EBITDA(1) 17.5 34.4 n/a 20.2 3.9 0.8 (0.1) n/a (2.5) (0.7) 4.9
Budgeted capital
expenditure(2) 13.4 – 30.3 8.3 – 32.5 n/a 8.4 – 39.6 11.1 – 13.6 7.4 – 9.6 8.2 – 11.4 n/a 12.0 – 19.0 9.1 – 10.9 9.3 – 11.2
Notes:
(1) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(2 ) Budgeted ca pital expend iture is expressed as th e range of cap it al expenditu re as a perce ntage of reven ue in t he initia l ten years for Turkey and G hana and the i nitial five years for all other cash g en er ating
units of the plans used for impairment testing.
Change required for carrying value to equal the recoverable amount
Turkey Germany Ghana Greece Ireland Italy Portugal Romania Spain UK
pps pps pps pps pps pps pps pps pps pps
Pre-tax adjusted discount rate 0.5 1.8 1.0 0.7 1.0 0.8 4.5 2.0 0.6 1.3
Long-term growth rate (1.1) (1.9) (5.1) (0.9) (1.2) (0.8) (5.6) (2.6) (0.6) (1.6)
Budgeted EBITDA(1) (2.0) n/a (2.8) (3.7) (8.7) (5.0) n/a (14.1) (4.5) (7.8)
Budgeted capital expenditure(2) 1.5 n/a 2.5 2.8 7.0 5.1 n/a 13.8 3.5 5.8
Notes:
(1) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(2 ) Budgeted ca pital expend iture is expressed as th e range of cap it al expenditu re as a perce ntage of reven ue in t he initia l ten years for Turkey and G hana and the i nitial five years for all other cash g en er ating
units of the plans used for impairment testing.
The changes in the following table to assumptions used in the impairment review would, in isolation, lead to an (increase)/decrease to the aggregate impairment loss/
(reversal) recognised in the year ended 31 March 2010:
India Turkey All other
Increase Decrease Increase Decrease Increase Decrease
by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps
£bn £bn £bn £bn £bn £bn
Pre-tax adjusted discount rate (1.7) 2.3 (0.3) n/a (4.4) –
Long-term growth rate 2.3 (1.6) n/a (0.1) – (3.7)
Budgeted EBITDA(1) 0.2 (0.2) n/a – – –
Budgeted capital expenditure(2) (0.2) 0.2 – n/a – –
Notes:
(1) Represents the compound annual growth rate for the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for impairment testing.
(2) Represents capital expenditure as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
31 March 2009
The estimated recoverable amount of the Group’s operations in Spain, Turkey and Ghana equalled their respective carrying value and, consequently, any adverse change
in key assumption would, in isolation, cause a further impairment loss to be recognised. The estimated recoverable amount of the Group’s operations in the UK, Ireland,
Romania, Germany and Italy exceeded their carrying value by approximately £900 million, £60 million, £300 million, £9,250 million and £2,200 million respectively. The
tables below show the key assumptions used in the value in use calculation and, for the UK, Ireland, Romania, Germany and Italy, the amount by which each key assumption
must change in isolation in order for the estimated recoverable amount to be equal to its carrying value.
Assumptions used in value in use calculation
Spain Turkey(1) Ghana UK Ireland Romania Germany Italy
% % % % % % % %
Pre-tax adjusted discount rate 10.3 19.5 26.9 8.6 10.2 14.8 8.5 11.8
Long-term growth rate 1.1 7. 5 7.3 1.0 −1.1 1.1 −
Budgeted EBITDA(2) (3.9) 22.3 37.2 (2.8) (3.5) (3.1) n/a 2.2
Budgeted capital expenditure(3) 9.1 – 11.8 8.2 – 69.8 7.7 – 91.6 n/a n/a n/a 5.5 – 9.7 7.7 – 9.9
Notes:
(1) The assumptions listed in the table were used in the value in use calculation at 31 March 2009. The pre-tax adjusted discount rate, long-term growth rate, budgeted EBITDA and budgeted capital
expenditure assumptions used in the value in use calculation at 30 September 2008 were 18.6%, 10.0%, 13.1% and 8.2% to 54.7%.
(2) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(3) B udg eted ca pital expend iture is expressed as th e range of cap it al expenditu re as a perce ntage of reven ue in t he initia l ten years for Turkey and G hana and the i nitial five years for all other cash g en er ating
units of the plans used for impairment testing.