AAK Annual Report 2020

AAK Annual Report 2020 97 Note 14 | Intangible assets Note 15 | Property, plant and equipment Reviewing impairment of goodwill In preparing the financial statements for 2020, the Group has reviewed impairment of goodwill. Goodwill is allocated to the following cash-generating units; business areas Food Ingredients, Chocolate & Confectionery Fats and Technical Products & Feed. These cash-generating units correspond to the operating segments of AAK. The recoverable amount for a cash-generating unit is determined by calculating its value in use. These calculations are based on estimated future cash flow as stated in budgets and forecasts covering a five-year period. Cash flow beyond this period has been extrapolated by no more than 3 percent (3) in any case. Working capital beyond the five-year period is estimated at the same level as year five. Discount rates are assumed to be 8 percent (8) after tax and 11.4 percent (11.4) before tax. Group Land and buildings Plant and machinery Equipment, tools and fixtures and fittings Non-current assets under construction Total Cost at January 1, 2019 2,394 9,432 672 739 13,237 Investments 4 277 35 469 785 Acquired through business combinations 10 191 1 - 202 Disposals -1 -18 -2 - -21 Reclassifications 46 385 20 -451 0 Exchange differences 89 364 38 25 516 Accumulated cost at December 31, 2019 2,542 10,631 764 782 14,719 Cost at January 1, 2020 2,542 10,631 764 782 14,719 Investments 9 430 56 223 718 Acquired through business combinations 28 29 3 - 60 Disposals -9 -39 -3 -4 -55 Reclassifications 49 184 54 -289 -2 Exchange differences -271 -755 -77 -45 -1,148 Accumulated cost at December 31, 2020 2,348 10,480 797 667 14,292 Testing has not demonstrated any need for impairment. The sensitivity in these calculations indicates that recognized goodwill is still intact even if the discount rate increases by 1 percent or if long-term growth is 1 percent less. Goodwill by cash-generating unit 2020 2019 Food Ingredients 1,286 1,213 Chocolate & Confectionery Fats 817 901 Technical Products & Feed - - Total 2,103 2,114