Group Management Report Corporate Governance Environment, Safety, and Corporate Social Responsibility Consolidated Financial Statements 105 The carrying amount of goodwill by cash-generating unit was as follows: Dec. 31, 2014 Dec. 31, 2015 BYK Additives & Instruments 293,702 324,052 ECKART Effect Pigments 80,254 86,054 ELANTAS Electrical Insulation 75,620 76,454 ACTEGA Coatings & Sealants 70,021 70,892 519,597 557,452 Impairment Test for Goodwill The Company performed impairment tests on goodwill. Impairment tests are performed at least once a year in the fourth quarter based on long-term planning. The recently performed tests were based on the financial budgets for the years 2016 to 2020. These budgets were based on historical experience and represent management’s best estimates about future devel- opments. The weighted average growth rates used in the budgets were derived from cor- responding industry forecasts. In order to perform impairment tests, the Company estimated cash flow projections beyond the budgets by extrapolating the projections using a steady growth rate for subsequent years. The Company then calculated the fair value less costs to sell for each cash-generating unit by applying the discounted cash flow method. The follow- ing parameters were applied: discount rate after income taxes of 7.5 %; growth rates: BYK Additives & Instruments 2.0 %; ECKART Effect Pigments, ELANTAS Electrical Insulation and ACTEGA Coatings & Sealants 1.5 %. The fair value calculated was then compared to the carry- ing amount of the cash-generating unit. The impairment tests were performed based on fair values less costs to sell. Further- more, to support the results of these impairment tests, the Company calculated the value in use for each cash-generating unit. In 2015, no impairment loss on goodwill was recognized. Sensitivity analyses for the BYK Additives & Instruments division, the ELANTAS Electrical Insulation division and the ACTEGA Coatings & Sealants division indicated that even a reasonably likely change in the underlying parameters would not have resulted in an impairment loss. The fair value of the ECKART Effect Pigments division did not exceed the carrying value as clearly as in the other divisions. If the EBIT that is used for the impairment test was 10 % lower than estimated, this would result in an insignificant impairment loss. The same applies to an increase of the discount rate to 8.25 %. As a result of the initiated restructuring measures the probability that an impair- ment loss will occur is deemed to be low. In the period since the performance of the impairment test until December 31, 2015, no impairment indicators were identified. Impairment Test for Intangible Assets Other Than Goodwill In 2015, an impairment loss on a brand name in the ACTEGA Coatings & Sealants division of € 2.4 million was recognized, because the brand name will no longer be used in the future. In 2014, no impairment losses on intangible assets with an indefinite useful life were recognized.
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