ANNUAL REPORT 2017
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NOTE 4. GOODWILL

The carrying amount of the goodwill is related to the acquisitions operations in the following business units:

 December 31,
 20162017
Thermal products business unit2,6112,611
Plasma products business unit8,6598,659
Total11,27011,270

We perform an annual impairment test on 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, a discounted future cash flow approach is used which makes use of our estimates of future revenues, driven by assumed market growth and estimated costs as well as appropriate discount rates.

The material assumptions used for the discounted future cash flows of the cash generating units (CGUs) are:

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, 2017 the recoverable amount of the CGUs exceeded the carrying value. The excess was over 100% for each of the CGUs. 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.

For Back-end, goodwill is included in the investment value of ASMPT. For the impairment test, reference is made to Note 6.