Modèle Word ddr danone

Goodwill, brands and investments in associates 
RISK IDENTIFIED 
OUR RESPONSE 
As at 31 December 2019, goodwill amounted to 18,125 
million euros, brands amounted to 6,329 million euros and 
investments in associates amounted to 2,055 million euros.
These assets are subject to impairment tests, at least once a 
year in the case of goodwill and brands with indefinite useful 
lives, and whenever there is an indication of impairment in 
the case of investments in associates.
The recoverable amounts of these assets or groups of assets 
are generally estimated on the basis of the discounted cash 
flows method or market value in the case of goodwill and 
investments in associates, and according to the royalties 
method for brands, as explained in Notes 5 and 10 to the 
consolidated financial statements.
The impairment tests are based on estimates and on 
management
’s judgment concerning (i) the allocation of 
these assets to cash generating units (CGUs) (ii) the 
estimation of the future performance of the assets or CGUs 
and (iii) the determination of the discount rates, long-term 
growth rates, and royalty rates in the case of brands. 
We therefore deemed as key points in our audit evaluation (i) 
the measurement of goodwill and brands, in particular those 
of Central Danone which were subject to an impairment of 
662 million euros in 2018 as mentioned in Notes 7.1 and 10 
of the Notes to the consolidated financial statements, and (ii) 
investments in associates, in particular the investment in 
Yashili, which has been impaired by a further 
€109 million in 
2019 as detailed in Notes 5.6 of the Notes to the 
consolidated financial statements.
Goodwill and brands 
We examined the processes set up by the management to allocate 
the goodwill to CGUs or groups of CGUs, in order to identify any 
indications of loss in value and to determine the cash flow projections 
underlying the impairment tests.
For a sample of CGUs and brands, identified on the basis of quan-
titative and qualitative factors, and in particular for the Centrale 
Danone CGU, and brands which have been impaired, we examined 
the methods and main assumptions used to determine recoverable 
value, including:
• 
the forecast cash flows: the assumptions relating to the 
growth of the business and market shares were compared 
with the available market analyses. We also compared the 
main assumptions with past performance and assessed the 
trends between past forecasts and actual figures;
• 
the long-term growth rates, the discount rates and the 
royalty rates, with the support of our financial valuation 
experts.
We also analyzed the sensitivity of the test results to the main 
assumptions used by management and examined the disclosures 
provided in the notes to the consolidated financial statements. 
Investments in associates
We assessed the approach adopted and the data used by the 
Company (market valuation, recent performance and forecast results) 
to identify any indications of loss in value.
For Yashili, we have implemented the procedures as described 
hereinbefore for goodwill and brands and we have examined the main 
assumptions used to determine the recoverable amount, notably by 
comparing with external evaluations. We have also examined the 
disclosures provided in the notes to the consolidated financial 
statements. 

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