Impairment Tests

The impairment test is an impairment test to be carried out at least annually to evaluate fixed asset items that are not depreciated according to schedule. This applies to goodwill recognised in the context of company acquisitions as well as intangible assets such as brands, technologies, customer bases or patents.

The impairment test is carried out in accordance with the accounting standards US-GAAP (two-step test) and IAS/IFRS (one-step test). In both cases, a forecast of the expected future cash flows is required as part of a planning calculation. To discount the cash surpluses, a calculation interest rate or discount rate must be determined.

The present value determined in this way (“fair value less costs to sell” or “value in use”) must be compared with the book value of the asset and any resulting depreciation must be calculated as an impairment loss.