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Note 7. Goodwill

The changes in the carrying amount of goodwill are summarized as follows:

Front-endBack-endTotal
Balance January 1, 201310,70130,70641,407
Deconsolidation ASMPT(29,366)(29,366)
Foreign currency translation effect(229)(1,340)(1,569)
Balance December 31, 201310,47210,472
Foreign currency translation effect683683
Balance December 31, 201411,15511,155

The carrying amount of the goodwill is related to the acquisition of the following entities:

 December 31,
 20132014
ASM Microchemistry Oy (Thermal products business unit)2,6112,611
ASM Genitech Korea Ltd (Plasma products business unit)7,8618,544
Total10,47211,155

We perform an annual impairment test at December 31 of each year or if events or changes in circumstances indicate that the carrying amount of goodwill exceeds its recoverable amount. For the Front-end impairment test and the determination of the recoverable amount, the value in use method is used, based on a discounted future cash flow approach that uses our estimates of future revenues, driven by assumed market growth and estimated costs as well as appropriate discount rates.

For Back-end, goodwill is included in the investment value of ASMPT. For the impairment test reference is made to Note 3.

The material assumptions used for the fair value calculation of the reporting units are:

  • an average discount rate of 13.0% (2013: 16.0%) representing the pre-tax weighted average cost of capital;
  • external market segment data, historical data and strategic plans to estimate cash flow growth per product line have been used; and
  • cash flow calculations are limited to five years of cash flow; after these five years perpetuity growth rates are set based on market maturity of the products. For maturing product the perpetuity growth rates used are 1% or less and for enabling technology products the rate used is 3% or less.

These estimates are consistent with the plans and estimated costs we use to manage the underlying business. Based on this analysis management concluded that as per December 31, 2014 the recoverable amount of the reporting units exceeded the carrying value. The excess was over 100% for each of the reporting units. Sensitivity analysis demonstrated that no reasonable possible change in estimated cash flows or the discount rate used in calculating the fair value would cause the carrying value of goodwill to exceed the fair value.

Welcome to our 2014 Corporate reporting site

ASMI has a dual listing on Nasdaq (North America) and Euronext (the Netherlands). Our full 2014 Annual report is prepared in accordance with International Financial Reporting Standards ('IFRS'), as endorsed by the European Union and can be viewed online conveniently. We also file the Annual report on Form 20-F with the US Securities and Exchange Commission, which is available as a PDF. All our 2014 reports can be downloaded quickly and easily.

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STATUTORY
ANNUAL REPORT 2014

Our Statutory annual report provides a comprehensive overview of company developments in 2014. It has been prepared in accordance with International Financial Reporting Standards ('IFRS') as endorsed by the European Union.

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ANNUAL REPORT ON
FORM 20-F 2014

Form 20-F 2014, which is compiled based on US GAAP, has been filed with the Securities and Exchange Commission. It may contain information additional to the Statutory annual report.

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CR REPORT
2014

Our goal is to create better products and add value to the company, our stakeholders and society at large in a responsible, sustainable manner. Our CS report covers all aspects of our efforts to manage our business responsibly.

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REMUNERATION
REPORT 2014

The Remuneration report 2014 provides a breakdown
of our Management Board and Supervisory Board remuneration.

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RECONCILIATION
US GAAP-IFRS 2014

With dual listing in North America and the Netherlands, we report in US GAAP and IFRS. This document outlines the main differences for ASMI relating to US GAAP and IFRS.

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