Vetoquinol Universal Registration Document 2019

82   Vetoquinol  Universal Registration Document 2019  Financial report 6 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements Analysis of goodwill allocated to these CGUs: €000 Dec 31, 2019 Dec 31, 2018 Vetoquinol Biowet Poland 2,239 2,216 Vetoquinol GmbH/Germany 1,705 1,705 Vetoquinol UK 413 393 Farmvet Systems 3,777 6,373 Vetoquinol Ireland 421 421 Vetoquinol Switzerland 1,038 1,000 Vetoquinol Austria 772 772 Vetoquinol Czech Republic 946 935 Vetoquinol USA 24,597 24,027 Vetoquinol Belgium 500 500 Vetoquinol Italy 6,465 6,465 Clarion 49,915 Vetoquinol Scandinavia 1,055 1,074 Vetoquinol Asia 41 40 Vetoquinol India 8,859 8,910 Vetoquinol SA France 14,439 14,404 Vetoquinol Australia 1,729 1,617 Vetoquinol Canada 10,529 9,850 Total 129,440 80,701 The differences in value between 2018 and 2019 result from the acquisition of Clarion Biociencias, the purchase price allocation for the Farmvet Systems acquisition and exchange differences on goodwill denominated in foreign currencies. The difference in goodwill for 2018 results from the Farmvet Systems acquisition and exchange differences. The recoverable value of intangible assets tested is the value in use determined using the discounted future cash flow method. Under this method, the recoverable amount of the asset is the present value of the estimated future cash flows expected from the continuous use of the asset and its disposal at the end of its useful life, less working capital and the value of other assets as of the date when the test is carried out. This valuation includes, in particular, a terminal value obtained by discounting to infinity a cash flow deemed to be normal at the end of the forecasting period. Cash flow forecasts were established over a five-year period, based on the 2020 budget projections drawn up by management and the following assumptions for the years 2021-2024: • Sales growth: - Western Europe: 1.7% - Eastern Europe: 2.3% - North America: 3.0% - Asia: 8.0% - Oceania: 5.0% • Growth to infinity of 1.6% to 5.0%, depending on the country. • The other values were derived from the cost structure shown on the most recent budget projection as of the date of the test (for example, profit margin from the 2020 budget applied to 2021 and the following years for the December 31, 2019 test), adjusted for non-recur- ring items. The discount rate varies by country, ranging from 7.08% to 13.90%. No impairment expense was recorded for the last two years. No impairment loss was identified for any of the other CGUs, or for any intangible assets or PP&E. Likewise, an impairment test was conducted on the Equistro trademark, an intangible asset with an indefi- nite life, assuming sales growth to infinity of 1.6% and a 7.24% discount rate. On the basis of this test, no impair- ment was found. Sensitivity testing based on a deviation of +/-1% in the discount rate resulted in no material negative adjust- ments as of December 31, 2019 and 2018.