content_image/218484.jpg content_image/218485.jpg
## NOTEs TO THE FINANCIAL sTATEMENTs 

FAIRFAx MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 30 JUNE 2013 

## 14. INTANGIBLE AssETs (CONTINUED) 

## discount rate 

The discount rate is an estimate of the post-tax rate that reflects current market assessment of the time value of money and the risks specific to the CGU. The post-tax discount rates applied to the CGU Groups’ cash flow projections were in a range producing a mid point of 11.0% for Australian and 10.9% for New Zealand Media (2012: Aust: 11.5%; NZ: 11.2%), 12.9% for Australian Online (2012: 12.8%) and 12.7% for New Zealand Online (2012: 12.6%). 

Each of the above factors is subject to significant judgement about future economic conditions and the ongoing structure of the publishing and digital industries. Specifically, the Directors note that the extent and duration of the current cyclical downturn in advertising is difficult to predict. The Directors have applied their best estimates to each of these variables but cannot warrant their outcome. To assess the impact of this significant uncertainty, and the range of possible outcomes, sensitivity analysis is disclosed below. 

## (ii) iMPACT oF PoSSiBle CHAnGe in key ASSuMPTionS 

Holding all assumptions constant, if year 1 cash flow forecasts declined by 5%, an additional impairment in aggregate of $50 million would arise for the Regional, Metropolitan, Agricultural and New Zealand CGU Groups. If year 1 cash flow forecasts increased by 5%, in aggregate, the impairment would be reduced by $34 million. 

Holding all assumptions constant, if year 3 cash flow forecasts declined by 5%, an additional impairment in aggregate of $64 million would arise for the Regional, Metropolitan, Agricultural and New Zealand CGU Groups. If year 3 cash flow forecasts increased by 5%, in aggregate, the impairment would be reduced by $21 million. 

Holding all assumptions constant, if the discount rate applied to the cash flow projections was increased by 0.5%, an additional impairment of $59 million would arise for the Regional, Metropolitan, Agricultural and New Zealand CGU Groups. If the rate was decreased by 0.5%, the impairment would be reduced by $25 million. 

Holding all assumptions constant, if terminal growth factors were reduced by a further 0.5% across all CGU’s then a further impairment of $49 million would arise for the Regional, Metropolitan, Agricultural and New Zealand CGU Groups. If terminal growth factors were increased by 0.5% across all CGU’s then the impairment would be reduced by $22 million. 

## (iii) AlloCATion oF GoodWill, liCenCeS, MASTHeAdS And TRAdenAMeS To CGuS 

For the financial year ended 30 June 2013, goodwill, licences, mastheads and tradenames were allocated to the CGU Groups below. The table below also indicates which operating segment each CGU Group belongs to. Operating segments are defined at Note 1(W) and Note 37 with further disclosure on the results for each operating segment. 

<img src='content_image/218484.jpg'>

<img src='content_image/218485.jpg'>

