The main assumptions used in these tests are presented in the table below:
| December 31, 2022 | |||
|---|---|---|---|
| (in millions of euros) | Carrying amount of goodwill | After-tax discount rate | Terminal growth rate |
| North America(1) | 8,912 | 11% | 2% |
| Europe | 1,810 | 10.5%-12.5% | 1.6%-2.5% |
| Asia-Pacific | 1,177 | 10.5% | 2.2% |
| Africa & Middle East | 387 | 12.5% | 2.3% |
| Latin America | 141 | 16.5%-19.5% | 2.5%-3% |
| Other goodwill | 119 | 9%-11% | 1.5%-1.6% |
| Total goodwill after impairment loss | 12,546 | ||
(1) North America goodwill of euro 8,912 million includes USA goodwill for euro 8,457 million and Canada goodwill for euro 455 million.For the purpose of the impairment tests, the value in use of the United States CGU is determined using the market multiples approach.
As of December 31, 2021, the goodwill tests had not led the Groupe to recognize any impairment losses. The after-tax discount rates used ranged from 8.5% (11% before tax) to 14% (19% before tax). The terminal growth rate used in the forecasts ranged from 1.5% to 3.3%.
Sensitivity tests have been performed on all cash-generating units by increasing or decreasing by 100 basis points the discount rate, by 50 basis points the long-term growth rate or the operating margin in the terminal year.
Those variations, considered individually, didn’t reveal carrying amount below the value in use, except for Brazil, Latin America, and Middle East & Africa cash-generating units.
For the latest, the additional impairment following the change in assumptions are disclosed below:
| Additional Impairment loss | |||
|---|---|---|---|
| (in millions of euros) | Brazil(1) | Latin America | Middle East & Africa |
| Discount rate sensitivity | |||
| 1% increase in discount rate | (5) | (5) | (14) |
| Long-term growth sensitivity | |||
| 0.5% decrease in LT growth rate | (2) | - | - |
| Operating margin sensitivity in terminal value | |||
| 0.5% decrease in margin | (2) | - | - |
(1) The impairment losses presented above are calculated after taking into account the impairment loss of euro 28 million recognized on the Brazil CGU.
As part of the program to optimize premises, aiming to consolidate the agencies on one or more sites in the main countries, it was necessary to empty leased space in order to make better use of the existing space at other sites. Consequently, right-of-use assets concerning the empty spaces were subject to total or partial impairment loss, and likewise concerning the fixtures in these spaces.
Euro 81 million in impairment losses were recognized in 2022 (euro 61 million net of tax), including euro 45 million for right-of-use assets and euro 12 million for fixtures. Expenses such as facility management expenses and any taxes on vacant properties in the amount of euro 24 million are included in vacant property provisions; they also include early termination penalties.
Euro 122 million in impairment losses had been recognized in 2021 (euro 91 million net of tax), including euro 95 million for right-of-use assets and euro 11 million for fixtures. Expenses such as facility management expenses and any taxes on vacant properties in the amount of euro 16 million were included in vacant property provisions; they also included early termination penalties.
