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The Group uses the strategic plans of the various businesses to calculate any possible
impairment losses and discounts expected future cash flows. The Group prepares the various
projections individually, taking into account the expected future cash flows of each cash-
generating unit.
At 31 December 2015, on the basis of the recoverability analysis conducted on the “Other
Businesses” cash-generating unit (CGU), the Group recognised an impairment loss on the
goodwill relating to Cordina Planet, S.L.U. amounting to EUR 3,181 thousand under
“Impairment and Gains and Losses on Disposals of Non-Current Assets” in the consolidated
statement of profit or loss.
For the “Radio” cash-generating unit (which coincides with the radio segment), the key
assumptions on which the cash flow projections are based relate mainly to advertising
markets, audience figures, advertising efficiency ratios and cost forecasts. Except for
advertising, which is measured on the basis of external sources of information, the data
assumptions are based on past experience and reasonable projections approved by
management of the Parent and updated in accordance with the performance of the
advertising markets.
These future projections cover the next five years. The cash flows for the years not
considered in the projections are estimated to be perpetual, with growth of 0%.
In assessing value in use, the estimated cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the assets. In order to calculate the rate, the current time
value of money and the risk premiums generally used by analysts for the business and
geographical area (Spain) are taken into account, giving rise to future discount rates of 9%-
10% in 2014 and 2015.
Based on the methods used and the estimates, projections and valuations of value in use
available to the Parent's directors, at the date of presentation of these consolidated financial
statements, it was determined that the goodwill recognised by the Group represents its
recoverable amount and, therefore, it was not necessary to recognise any impairment losses.
The Group also performs sensitivity analyses when there are reasonably possible changes in
the key assumptions used to calculate the recoverable amount of the “Radio” cash-
generating unit. In this respect, the sensitivity analyses are prepared under various
scenarios on the basis of the variables deemed most significant, i.e. advertising revenue,
which depends mainly on the performance of the advertising market and the investment
share, and the discount rate.
The sensitivity analysis conducted demonstrates that an increase in the perpetuity growth
rate of 1.0% would give rise to an increase in value of EUR 13 million, whereas a decrease in
the perpetuity growth rate of 1.0% would give rise to a decrease in value of EUR 11 million.
Similarly, a decrease of 1.0% in the discount rate would give rise to an increase of EUR 18
million. The changes in value used in all the sensitivity analyses would not reduce the
recoverable amount below the carrying amount. With a perpetuity growth rate of zero and
increases in the discount rate of more than 1.0%, the recoverable amount would be below
the carrying amount.