74 Goodwill and other intangible assets Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3 Result from joint ventures 2016 2015 Profit or loss from continuing operations 9 (5) Post-tax profit or loss from discontinued operations Net profit 9 (5) Other comprehensive income Total comprehensive income 9 (5) Contingent assets and liabilities Rabo Real Estate Group entered into commitments on 31 December 2016 with regard to real estate projects, commitments with third parties (including subcontractors and architects) for the amount of 27 (2015:17). Goodwill is reviewed for impairment by comparing the carrying amount of the cash generating unit (including goodwill) with the best estimate of the value in use of the cash generating unit. For this purpose, the best estimate of the value in use determined on the basis of cash flow forecasts is used first, as taken from annual medium-term plans drawn up as part of the annual planning cycle.The plans reflect the management's best estimates of market conditions, market restrictions, discount rates (before taxation), growth in operations, etc. If the outcome shows that there is no significant difference between the fair value and the carrying amount, the fair value is assessed in more detail, with the relevant share price being used for listed companies. In addition, valuation models are used which are similar to the initial recognition of an acquisition, peer reviews, etc. The valuation models are tested and include the development of the activities since the acquisition, the most recent income and expenses forecasts drawn up by management, as well as updated forecasts, assessments of discount rates, final values of growth rates, etc. Peer reviews include an assessment of the price/earnings ratio and price/carrying amount ratio of similar listed companies, or similar market transactions. Assumptions are generally based on experience, management's best estimates of future developments and, if available, external data. The carrying amount of the goodwill allocated to RNA in the wholesale banking segment is 136 (2015:131).The recoverable amount is based on the value in use and determined using cash flow forecasts.The principal assumptions used are a growthrate of after tax earnings expected in the near term of 12.8% (2015: average of 7.5%), the discount rate of 13% (2015:14%) and the multiplier used for calculating the present value of the discounted cash flows after the forecast period of 16 (2015:16). As the recoverable amount exceeds the carrying amount, it was concluded that the goodwill allocated to RNA was not impaired. A change of 0.5% in the discount rate does not cause the carrying amount to exceed the recoverable amount. The goodwill allocated to one of the cash-generating units in the domestic retail segment is significant in comparison with the goodwill's total carrying amount.The carrying amount of this goodwill is 322 (2015: 322) and the cash-generating unit is the collective of local Rabobanks.The recoverable amount is based on the value in use. The value in use is determined using cash flows expected in the near future based on financial forecasts. As the recoverable amount substantially exceeded the carrying amount, it was concluded that the goodwill allocated to this cash-generating unit was not impaired. An increase in the discount rate of 10% or a reduction in the future cashflows of 10% are considered to be a maximum of possible changes in key assumptions. Such a change does not cause the carrying amount to exceed the recoverable amount and would not result in an impairment. No impairment of goodwill was recognised in 2016 (2015: 623). Impairments of software developed in-house and other intangible assets are not individually material. The total impairments of software developed in-house was 4 (2015: 30). This was mainly caused by the fact that the software is (partly) no longer used. Software Other developed intangible in millions of euros Goodwill in-house assets Total Year ended 31 December 2016 Opening balance 905 428 160 1,493 Foreign exchange differences 1 (1) 2 2 Additions 1 105 52 158 Disposals - (1) (7) (8) Changes due to sale of Athlon (367) - - (367) Other (3) 6 - 3 Amortisation - (113) (75) (188) Impairments - (4) - (4) Closing balance 537 420 132 1,089 Cost 1,227 1,465 564 3,256 Accumulated amortisation and impairments (690) (1,045) (432) (2,167) Net carrying amount 537 420 132 1,089 Year ended 31 December 2015 Opening balance 1,454 421 184 2,059 Foreign exchange differences 79 1 4 84 Additions 4 380 54 438 Disposals - (239) (12) (251) Other (9) 11 7 9 Amortisation - (116) (77) (193) Impairments (623) (30) - (653) Closing balance 905 428 160 1,493 Cost 1,571 1,450 646 3,667 Accumulated amortisation and impairments (666) (1,022) (486) (2,174) Net carrying amount 905 428 160 1,493 224 Rabobank Jaarverslag 2016

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Jaarverslagen Rabobank | 2016 | | pagina 225