Page 146 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

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MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
The Group’s estimates on the future trend of the advertising market are based on market forecasts and historic
performance, as well as its correlation with economic conditions, using reasonable projections in accordance with
external information sources.
Projected income estimated for upcoming years is calculated based on the abovementioned advertising market trend,
while taking into account reasonable hypotheses regarding audience numbers.
Programming cost assumptions took into account forecasted internal and external audiovisual production costs, as well
as the amount of investment necessary to maintain audience levels.
The estimates cover a period of five years and for cash flows not considered, income to perpetuity is estimated using
a growth rate of around 2% (2011: 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 9.75%
(2011: 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.
Sensitivity to changes in assumptions
Management believes that, based on information currently available, no reasonably possible change in any of the above
key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount.
10. EQUITY METHOD INVESTMENTS
The amounts and changes in 2012 and 2011 in the items composing “Equity method investments” are as follows:
Equity method investment
Balance at December 31, 2010 496,725
Increases/decreases
Equity method investments 7,460
Dividends receipts (20,275)
Other non-comprehensive income
Other movements (823)
Balance at December 31, 2011 483,087
Increases/decreases
Equity method investments 8,452
Dividends receipts (22,101)
Other non-comprehensive income
Other movements (1,495)
Balance at December 31, 2012 467,943