| The total carrying value was distributed and changed as follows. |
| See Note 34 "Business Combinations, etc" for more information on significant acquisitions in 2007. |
| Capitalized development expenses, primarily for administrative software systems, amounted to SEK 438 million in 2007 and SEK 175 million in 2006. In these years, amortization was SEK 335 million and SEK 362 million, respectively. |
| Goodwill is allocated between TeliaSonera's business areas as follows. |
| Goodwill as allocated in the organization existing up to the end of 2006 was to a large extent directly attributable to the new business organization. The goodwill from the acquisition of Sonera Oyj in 2002 did, however, relate to more than one part of the organization and the relative value approach was used to allocate the goodwill between business areas Mobility Services (SEK 21,297 million) and Broadband Services (SEK 8,155 million). The main part of business area Mobility Services' goodwill, in addition to the Sonera Oyj acquisition, arose in connection with the acquisitions of NetCom ASA in 2000 (SEK 21,893 million) and Orange Denmark in 2004 (SEK 3,860 million). Business area Eurasia's goodwill increased in 2007 following the acquisitions of the Uzbek and Tajik operations (SEK 3,221 million). |
| The total carrying value of other intangible assets was distributed by asset type as follows. |
| Goodwill is for impairment testing purposes allocated to cash-generating units in accordance with TeliaSonera's business organization. Carrying values of all cash-generating units are annually tested for impairment. The recoverable amounts (that is, higher of value in use and fair value less cost to sell) are normally determined on the basis of value in use, applying discounted cash flow calculations. From time to time, TeliaSonera may also obtain independent appraisals of fair values to determine recoverable amounts. |
| As of December 31, 2007, the recoverable values of the cash-generating units were found to be in excess of their carrying values in all tests and therefore the related goodwill was not impaired. Management has used assumptions that it believes are reasonable based on the best information available as of the date of the financial statements. |
| The key assumptions used in the value in use calculations were sales growth, EBITDA margin development, the weighted average cost of capital (WACC), and the terminal growth rate of free cash flow. The calculations were based on 5-year forecasts approved by management, which management believes reflect past experience, forecasts in industry reports, and other externally available information. Due to the nature of the investment, the forecast period used for business area Mobility Services' Spanish operations was 10 years. |
| The post-tax WACC rates used in the impairment tests varied by geographic area as follows. |
| The growth rates used to extrapolate cash flows beyond the 5-year forecasts (in Spain 10 year forecast) varied from operation to operation. For operations within business area Mobility Services the growth rate varied between 1.0 and 2.5 percent. The corresponding rates for operations within the other business areas were 1.0 percent for Broadband Services and Integrated Enterprise Services and 1.0 - 3.0 percent for Eurasia. In all cases management believes the growth rates to not exceed the average growth rates for markets in which TeliaSonera operates. |
