Impairment tes tin g F or the purpose of impairment tes tin g assets are grouped at the lo w es t le v els for which there are separ ately identifable cash fo ws Cash G ener atin g U nit that is per countr y in a se gment GOOD WILL AS PER DECEMBER 31 20102012 IS DIS TRIBUTED PER SEG m ENT AS f OLL O W S M SEK 2012 2011 1 2010 1 Securit y Ser vices North America 5 9969 6 3346 6 1099 Securit y Ser vices Europe 4 8121 4 9132 4 2512 m obile and m onitorin g 1 6723 1 7248 1 7126 Securit y Ser vices Ibero America 1 5421 1 4877 1 1103 Other 2520 2671 1548 T ot al g oodwill 14 2754 14 7274 13 3388 1 The compar ativ es ha v e been res t ated due to oper ations mo v ed bet w een the se gments Securit y Ser vices Europe M obile and M onitorin g and Securit y Ser vices Ibero America F urther information is pro vided in note 9 G oodwill is tes ted on an annual basis for possible impairment Securit as also carries out impairment tes tin g for other int an g ible assets for which there is an indefnite useful life Currently these assets are limited to M SEK 159 159 and 00 and relates to the consider ation paid for the br and Securit as in one of the Group s countries of oper ations V alue in use is measured as e xpected future discounted cash fo ws The cash fo ws ha v e been calculated based on fnancial plans de v eloped in each countr y and business se gment The fnancial plans are built upon the re gular business plan for the ne xt fnancial y ear which ha v e been ascert ained b y Group M ana g ement and ha v e been appro v ed b y the Boar d of Director s These fnancial plans normally co v er a forecas ted period of fv e y ear s and include the or ganic sales gro wth the de v elopment of oper atin g mar g in and chan g es in the le v el of oper atin g capit al emplo y ed Cash fo ws be y ond the fv e y ear forecas t ha v e been e xtr apolated usin g an es timated gro wth r ate of 23 percent for all countries and business se gments A lon g term gro wth r ate of 23 percent for guar din g ser vices is at pres e n t re gar ded as bein g a cautious es timate in view of the business areas his t o r i c a l or ganic gro wth r ate and also t akin g into consider ation e xternal es ti mates of the future F reedonia for e xample es timates that the mark et for guar din g ser vices in Europe will gro w at an a v er a g e r ate of some 4 percent per annum durin g the period 2011 to 2021 The correspondin g fgure for the North America mark et is around 6 percent The mark et for mobile and monitorin g in Europe is es timated to gro w fas ter than tr aditional guar din g The es timate for the v alue in use is based on assumptions and es timates in addition to the es timated gro wth after the forecas ted period The mos t signifcant of these relate to the or ganic sales gro wth the de v elopment of the oper atin g mar g in the chan g e in oper atin g capit al emplo y ed as w ell as the rele v ant W A C C W eig hted A v er a g e Cos t of Capit al r ate used to dis count the future cash fo ws These assumptions and jud gments are also based on fnancial plans de v eloped in each countr y and business se gment and are built upon the re gular business plan for the ne xt fnancial y ear which has been ascert ained b y Group M ana g ement and appro v ed b y the Boar d of Director s In addition to this the assumptions and jud gments are based on each countr y s and each line of business gro wth and proft abilit y le v el The assumptions are also v erifed b y re viewin g e xternal sources such as F reedonia Assumptions relatin g to W A C C are calculated locally meanin g that both risk free r ate of return and the implicit risk premium are local Th E AS S u m P TIONS AND E S TI m A TE S T h A T h A v E f OR m ED T h E B ASE f OR T h E I m P AIR m ENT TE S TING ARE S h O WN IN S u mm AR y AND B y SEG m ENT A C C ORDING T O T h E f OLL O WING E s timat ed gro w th rat e bey ond f orecas t ed period W A C C 2012 Securit y Ser vices North America 2030 6298 Securit y Ser vices Europe 2030 54135 m obile and m onitorin g 20 6165 Securit y Ser vices Ibero America 2030 62197 Other 1 2030 58190 2011 Securit y Ser vices North America 20 6592 Securit y Ser vices Europe 20 55139 m obile and m onitorin g 2 20 6367 Securit y Ser vices Ibero America 20 64106 Other 1 20 59144 2010 Securit y Ser vices North America 20 6795 Securit y Ser vices Europe 20 56120 m obile and m onitorin g 2 20 6471 Securit y Ser vices Ibero America 20 64138 Other 1 2030 62100 1 The oper ations in the Middle Eas t Asia and Africa are included in Other 2 The compar ativ es ha v e been res t ated due to oper ations mo v ed bet w een the se gments Securit y Ser vices Europe and m obile and m onitorin g f urther information is pro vided in note 9 The annual impairment tes t of all Cash G ener atin g U nits which is required under IFRS took place durin g the thir d quarter 2012 in con junction with the business plan process for 2013 As a result of this a decision w as made to recogniz e impairment losses of g oodwill and other acquisition related int an g ible assets amountin g to M SEK 26 in Securit y Ser vices M ontene gro In 2011 and 2010 no impairment losses w ere recogniz ed The follo win g sensitivit y analyses ha v e been made of the es timates of v alue in use in connection with impairment tes tin g assumption b y assumption g ener al reduction of 1 percent a g e point in the or ganic sales gro wth r ate durin g the forecas tin g period g ener al reduction of 05 percent a g e points in the oper atin g mar g in g ener al increase of 05 percent a g e points in the W A C C and g ener al decrease of the es timated gro wth after the fore cas ted period b y 05 percent a g e points The sensitivit y analyses sho w ed that a reduction of the or ganic sales gro wth b y 1 percent a g e point durin g the forecas tin g period w ould result in an impairment loss of g oodwill of tot ally M SEK 10 for t w o Cash G ener atin g U nits in Securit y Ser vices Europe and tot ally M SEK 93 for three Cash G ener atin g U nits in the se gment Other A reduction of 05 percent a g e points in the oper atin g mar g in w ould result in an impairment loss of g oodwill of M SEK 18 for t w o Cash G ener atin g U nits in Securit y Ser vices Europe and tot ally M SEK 100 for three Cash G ener atin g u nits in the se gment Other An increase in the W A C C of 05 percent a g e points w ould result in an impairment loss of g oodwill of tot ally M SEK 12 for t w o Cash G ener atin g U nits in Securit y Ser vices Europe and tot ally M SEK 98 for three Cash G ener atin g U nits in the se gment Other A g ener al decrease of the es timated gro wth after the forecas ted period b y 05 per cent a g e points w ould result in an impairment loss of g oodwill of tot ally M SEK 9 for t w o Cash G ener atin g U nits in Securit y Ser vices Europe and tot ally M SEK 86 for three Cash G ener atin g U nits in the se gment Other Aside from this the sensitivit y analyses sho w ed that none of the adjus tments s t and alone w ould result in an impairment loss in an y Cash G ener atin g U nit 108 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012