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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
NOTES TOTHE FINANCIAL STATEMENTS FOR THEYEAR ENDED DECEMBER 31, 2013
(Thousands of euros)
Impairment testing of goodwill
In accordance with accounting standards, at December 31, 2013, 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 advertising markets, audiences and costs.
The Company’s estimates on the future trend of the advertising market are based on market forecasts and historic
performance, as well as its correlation to economic conditions, using reasonable projections in accordance with external
information sources.
Projected income estimated for future years is calculated based on the abovementioned advertising market trend
calculation, while taking into account reasonable hypotheses regarding audience numbers. Using this hypothesis, the
Company considered the possible impact of the contingency described in Note 14.
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.
These 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% (the percentage applied during the prior year). 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 was 9.57% (2012: 9.75%).
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.
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