Annual Report 2017

14. Goodwill

in thousands of EUR

Notes

2017

2016

At 1 January

1,012,059

1,025,213

Acquisitions

6

119,100

7,597

Adjustment to purchase price allocation

-

- 3,647

Impairment

- 38,045

- 2,324

Reclassification

2,179

- 118

Exchange differences

- 29,826

- 14,662

At 31 December

1,065,467

1,012,059

Costs

1,141,205

1,053,233

Accumulated impairment

- 75,738

- 41,174

Carrying amount

1,065,467

1,012,059

In 2017, the acquisitions mainly relate to Visilab and Tesco Opticians. Refer to note 6 for more details. The increase in exchange differences is mainly due to the weakening of the US Dollar.

In 2017, the carrying amount of the CGU United States, has been reduced to its recoverable amount of €107,134 through recognition of an impairment loss against goodwill of €37,846. This mainly resulted from continued investments in the growth platform and longer than expected organizational rebuild including the recently completed management restructuring, delaying the improvement of profitability of the US business. The CGU of the United States operates in the Americas & Asia segment. The recoverable amount was determined by fair value less costs of disposal method using the discounted cash flow method based on its highest and best use and a discount rate of 8.72%. For details on sensitivity analysis for the key assumptions refer to note 4.1.

The impairment charge in 2016 related to an impairment in Peru and Argentina, which operate in the Americas & Asia segment.

The impairment charges are included in the general and administrative costs in the Income Statement.

The table below shows goodwill per segment:

in thousands of EUR

31 December 2017

31 December 2016

G4

422,812

410,970

Other Europe

480,583

379,634

Americas & Asia

162,072

221,455

1,065,467

1,012,059