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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
Outstanding provisions at year-end 2011 and 2010 correspond to the net carrying amount of rights which, while
expiring later than 31 December 2011 and 2010, did not feature in the channel’s future broadcasting plans at the time
of these financial statements were prepared. Should one of the Company’s networks exercise these broadcasting rights,
the provision would be reversed and the right would be amor tised for the amount of the reversal.This would not have
an impact on the income statement.
Of the total amount recognised under “Non-current assets - Audiovisual rights” in the balance sheet at 31 December
2011, the Company estimates a slightly higher percentage consumption than that estimated for the 12 months subsequent
to year-end 2010 of 35%.This estimate was based on the best information available at that date using the programming
budget for the next year.
At year-end 2011, there were firm commitments to acquire audiovisual proper ty rights available star ting 1 January
2012 for a total amount of USD139,836 thousand and EUR 155,284 thousand. At 31 December 2011, prepayments of
EUR 4,758 and USD 262 thousand had been made in connection with said firm commitments to acquire audiovisual
proper ty rights.
At year-end 2010, there were firm commitments to acquire audiovisual proper ty rights available star ting 1 January 2011
for a total amount of USD135,858 thousand and EUR 237,699 thousand. At 31 December 2010, prepayments of EUR
5,127 thousand had been made in connection with said firm commitments to acquire audiovisual property rights.
At 31 December 2011 advances paid for fiction series totalled EUR 230 thousand. At 31 December 2010 these
advances totalled EUR 972 thousand.
At 31 December 2011 and 2010, the amounts of fully depreciated assets still in use are as follows:
2011
2010
Software
13,150
10,956
Co-production rights
6,712
6,712
Distribution rights
10,397
10,397
Other auxiliary services
539
539
30,798
28,604
Impairment testing of goodwill
In accordance with accounting standards, at 31 December 2011, the Company tested its goodwill and intangibles with
indefinite lives for impairment.
The impairment test was carried out by comparing the recoverable value of the cash-generating unit to which the
goodwill and intangibles with indefinite lives are assigned with the carrying value of the cash-generating unit.
The cash-generating unit is the free-to-air TV business.
To test its goodwill for impairment, the Company took the free-to-air TV business’ strategic plan and discounted the
estimated future cash flows.The assumptions used in the cash flow estimates include the best estimate of future trends
of adver tising markets, audiences and costs.These estimates are based on past experience and estimates considered to
be reasonable based on the sources of the company’s external and internal information.
The estimates cover a period of six years and for cash flows not considered, income to perpetuity is estimated using a
growth rate of around 2%. Estimated cash flows are discounted at a rate that represents the current market assessment
of the risk-free rate and the specific situation of the industry.The discount rate used is around 9.3%.
Based on the assumptions used and the estimated cash flows calculated, no impairment was identified for either goodwill
or intangibles with indefinite lives.