## 2.3  SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) 

to be maintained for an indefinite period in the relevant markets, and these markets are expected to be profitable for a long period, the useful life of the trademark is determined to be indefinite. 

The tax rate is the expected future tax rate in each country based on current legislation. The impairment test at year-end 2013 incor- porated tax rates in the range of 15-34%. 

The discount rate is an after-tax WACC cal- culated country by country based on long- term expectations for each trademark. 

## PROPERTY, PLANT AND EQUIPMENT 

Property, plant and equipment are impair- ment-tested when there are indications of impairment. Management performs an annual assessment of the assets’ future application, e.g. in relation to changes in production structure, restructurings or closing of breweries. The impairment test is based on budgeted and estimated cash flows from the cash-generating unit. The assessment is based on the lowest cash-generating unit affected by the changes that indicate impair- ment. The discount rate is an after-tax WACC 

that reflects the risk-free interest rate with the addition of a risk premium associated with the particular asset. 

## ASSOCIATES 

Management performs an impairment test of investments in associates when there are indications of impairment, e.g. due to loss-making activities or major changes in the business environment. The impairment test is based on budgeted and estimated cash flows from the associate and related assets which form an integrated cash- generating unit. The pre-tax discount rate reflects the risk-free interest rate with the addition of a risk premium associated with the particular investments. 

## 2.3 ACCOUNTING POLICIES 

Goodwill and trademarks with indefinite useful life are subject to an annual impairment test, initially before the end of the acquisition year. 

The carrying amount of goodwill is tested for impairment annually, together with the other non-current assets in the cash-generating unit to which goodwill is allocated. The recoverable amount is generally calculated as the present value of expected future net cash flows (value in use) from the entity or activity (cash-generating unit) to which the goodwill is allocated. 

The carrying amount of trademarks with indefinite useful life is subject to an annual impairment test. The recoverable amount is generally calculated as the present value of expected future net cash flows from the trademark in the form of royalties (the relief from royalty method). 

The carrying amount of other non-current assets is subject to an annual test for indications of impair- ment. When there is an indication that assets may be impaired, the recoverable amount of the asset is determined. The impairment test is performed for the individual asset or in combination with related assets which form an integrated cash-generating unit. The recoverable amount is the higher of an asset’s fair value less expected costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or the cash-generating unit to which the asset belongs. 

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds the recoverable amount of the asset or the cash-generating unit. Impairment of goodwill, trademarks and significant impairment losses on property, plant and equipment and associates, and impairment losses arising on extensive struc- turing of processes and fundamental structural adjustments are recognised under special items. Minor impairment losses are recognised in the income statement under cost of sales, sales and distribution expenses, administrative expenses or other operating activities, net. 

Impairment of goodwill is not reversed. Impair- ment of other assets is reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation. Impairment is only reversed to the extent that the asset’s new carrying amount does not exceed the carrying amount of the asset after amortisation/deprecia- tion had the asset not been impaired. 

