80
The movements in this heading of the consolidated balance sheet in 2015 and 2014 were as follows (in thousands of euros):
Company
Goodwill
31.12.13
Currency
translation differences
Impairment
Goodwill
31.12.14
NH Hoteles Deutschland, GmbH and NH Hoteles Austria GmbH
94,710
-
(4,765)
89,945
Others
2,511
1,467
-
3,978
Total
97,221
1,467
(4,765)
93,923
Company
Goodwill
31.12.14
Additions
Currency
translation
differences
Impairment
Goodwill
31.12.15
NH Hoteles Deutschland, GmbH and NH Hoteles Austria GmbH
89,945
-
-
(4,765)
85,180
Hoteles Royal, S.A.
-
36,430
(6,779)
-
29,651
Others
3,978
-
(16)
-
3,962
Total
93,923
36,430
(6,795)
(4,765)
118,793
The acquisition of Hoteles Royal, S.A. gives a first consolidation negative difference of 36.4 million euros. This difference constitutes goodwill of
Royal Hotel, S.A. and it emerges as the difference between the purchase price of 94.8 million euros, and the value of net assets acquired, amounting
to 58.4 million euros, and has been recorded according to the report “Purchase Price Allocation “drawn up by an independent third party.
In addition, the valuation of the net assets acquired has been carried at fair value, in compliance with IFRS 3 “Business Combinations” and IFRS 13
“Fair Value Measurement”. To do this, the Group has based its findings on appraisal reports of independent experts on material fixed assets and the
methodologies “Multi-Period Earnings Method” for the assessment of hotel operating rights, and “Relief from Royalty” for the registration of Hoteles
Royal trademarks.
The discount rates used in the projections for the valuation of intangible assets of Hoteles Royal were 10.77% for hotels in Colombia and Ecuador,
and 11% for hotels in Chile.
At 31 December 2015 the goodwill generated with the acquisition of Grupo Royal has not been subjected to an impairment test because it is valued
according to a transaction with independent third parties at a market value and backing up the “Purchase price allocation” with a report of an
independent third party.
The recoverable value of the operating rights of Grupo Royal hotels has been assigned to each cash-generating units using projections on results,
investments and working capital according to the term of the contracts.
Recoverable goodwill values of the rest have been allocated to each cash-generating unit, mainly rental agreements, by using projections on results,
investments and working capital, according to the terms of the contract.
Details of the cash-generating units to which such goodwill arising on consolidation has been allocated are shown below:
Thousands of euros
CGU’s Grupo Royal
29,651
CGU 6
15,934
CGU 21
10,392
CGU 22
7,977
CGU 12
7,400
CGU 5
6,456
CGU 13
5,916
CGU 2
5,276
CGUs with goodwill allocated individually < €4 M
29,791
118,793
The basic assumptions used to estimate future cash flows of the CGUs, except for the Grupo Royal aforementioned, are detailed below:
• Discount rate: 6.45% and 6.81%, since these are CGUs subject to the same risk (German and Austrian market).
• Terminal value growth rate (g): 2%
The allocation of the impairment of the financial year, amounting to 4,765 thousand euros, took place as a result of the failure to consider perpetual
income in the case of cash-generating units whose leases do not ensure renewal. Thus the projections are for the term of these contracts.
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
