Investor Relations
The English version of Hemtex Investment Relations site is not being updated, due to the current shareholder structure. Please visit our Swedish Investment Relations site for updated information

Note 6 - Depreciation/amortization and impairment of tangible and intangible fixed assets

  Group Parent Company
  2009* 2010 2009* 2010
Capitalized expenditure for computer software – 2,962 – 5,968 – 2,962 – 5,968
Rental rights – 3,945 – 5,285 – 3,722 – 5,075
Goodwill – 36,953 – 27,736 – 12,864
Equipment, tools, fixtures and fittings – 22,917 – 28,346 – 14,245 – 20,132
Improvement expenses pertaining to third party properties – 13,854 – 5,423 – 6,849 – 3,318
Total – 80,631 – 45,022 – 55,514 – 47,357
         
* Pertains to the abbreviated fiscal year May 1–December 31, 2010.  

 

During the abbreviated 2009 fiscal year, a change in useful life from 20 to five years had an impact of SEK 12.7 M on depreciation of improvement expenses pertaining to third party properties.

Goodwill exists for two groups of cash-generating units and as a whole is attributable to the retail sales operations. The groups are reported according to the unit division below.

All goodwill values were tested for each cash-generating unit based on value in use. Value in use is based on the cash flow after tax that is deemed to be generated during the unit’s remaining lifetime. The company’s budget and prepared forecasts were used when calculating the future cash flow for each unit. The budget and forecast are based on actual profits in the operations and the company’s business plan. The budget and forecast normally cover 1–5 years of the useful life, with the remaining time extrapolated based on a growth rate of 2.5% (3).

This measurement is based on cash flow forecasts for coming years, following which a perpetual flow is used, since it is not possible to establish a limited life for this asset. The perpetual growth factor is assessed to match the rate of inflation for coming years. The value in use is calculated based on a discount rate of 15% (12) before tax.

This year’s testing revealed no impairment requirement. In the preceding year, an impairment requirement amounting to SEK 36.9 M was identified, which was charged against operating profit. Of the impairment of goodwill in 2009, SEK 19.5 M pertains to the Danish operation and the remaining SEK 17.4 M to Swedish operations. All goodwill values were tested in conjunction with preparation of the annual accounts at December 31, 2010.

A general analysis of the sensitivity inherent in the variable used was performed. The assumption of a decline in the annual growth rate from 2.5% to 1.5% and an assumption of an increase in the discount interest rate from 15% to 16% before tax would not individually entail any additional impairment requirement.

In the impairment testing of other assets, management had no indication of any impairment requirement existing in the Group.