Other rights and licenses include brands, supply rights and publishing rights, along with acquired software and other licenses. In the financial year, BMG acquired music catalogs in the amount of €102 million, of which €53 million related to several music catalogs in the United Kingdom and €43 million to several music catalogs in the United States. Internally generated intangible assets mostly include own film and TV productions and internally generated software. As in the previous year, no intangible assets have been provided as collateral for liabilities.

Goodwill  and other intangible assets are attributable to the following cash-generating units:

Intangible assets with an indefinite useful life are primarily Groupe M6 trademark rights in France (€120 million; previous year: €120 million). In determining that the M6 brand has an indefinite useful life, management has considered various factors such as the past and expected longevity of the brand, the impact of possible changes in broadcasting technologies, the impact of possible evolutions of the regulatory environment in the French television industry, the current and expected audience share of the M6 channel, and M6 management’s strategy to maintain and strengthen the trademark “M6.” As of December 31, 2017, based on the analysis of these factors, there is no foreseeable limit to the period of time over which the M6 brand is expected to generate cash inflows.

For the purpose of Impairment  testing in accordance with IAS 36, goodwill from a business combination is allocated to the cash-generating units that are expected to benefit from the synergies of the business combination.

The recoverable amount of the impairment test for RTL Group’s goodwill recognized at Group level was determined on the basis of the market price, which is based on level 1 of the fair value hierarchy. As of December 31, 2017, the market price of RTL Group S.A. shares on the Frankfurt Stock Exchange was €67.07 (December 31, 2016: €69.73). No impairment was identified for goodwill carried. The recoverable amount for the goodwill impairment test of the cash-generating unit Groupe M6 was determined on the basis of the market price, which is based on level 1 of the fair value hierarchy. As of December 31, 2017, the market price of Groupe M6 shares on the Paris Stock Exchange was €21.54 (December 31, 2016: €17.67).

For the other cash-generating units, the recoverable amount equals the fair value, which is derived from discounted cash flows less costs of disposal, and which is based on level 3 of the fair value hierarchy. Projected cash flows were based on internal estimates for three detailed planning periods and, as a rule, two further detailed planning periods were applied. For periods after this detailed horizon, a perpetual annuity was applied, taking into account individual business-specific growth rates.

The cash flow forecasts underlying the impairment testing of the individual cash-generating units bearing material goodwill are based on the following assumptions relating to the market development for the beginning of the detailed planning period:

• For 2018, the European TV advertising markets are expected to remain stable or to grow at a moderate rate, apart from the Netherlands where a moderate decline is anticipated.
• In the book markets, an overall stable development is expected.
• In the magazine business, the strong decline in the print advertising and circulation markets in Germany and France will persist in 2018, while continued strong growth is expected in the digital segment.
• For 2018, continuing moderate growth of the global music market is expected in the publishing rights market segment, while significant growth is anticipated in the recording rights market segment.
• In 2018, the services markets are expected to achieve growth similar to the previous year.
• In 2018, the gravure printing market is likely to show an ongoing significant decline. Continued stable development is expected however for the offset market in Europe and the book printing market in North America.
• Overall, sustained strong growth is anticipated for the relevant US education markets.

In addition, fair values based on discounted cash flows were measured using the following individual business-specific growth rates and discount rates for periods after the detailed planning period:

In the financial year 2017, impairment losses on goodwill amounted to €30 million, which fully relates to the cashgenerating unit Gruner + Jahr Magazines and digital business International. Due to a difficult market environment and declines in advertising and circulation revenues in the print sector, the recoverable amount was lower than the carrying amount. Impairment losses were measured on the basis of the following assumptions: a discount rate of 6.5 percent and a long-term growth rate of 0.0 percent. In the previous year, no impairment losses were recognized for goodwill. Impairment losses on goodwill and other intangible assets with indefinite useful lives are disclosed in the income statement under “Amortization/depreciation, impairment losses and reversals on intangible assets and property, plant and equipment.”

In addition to organic initiatives to develop new formats and intellectual property, Fremantle Media has continued its focus on the identification and integration of new businesses in order to increase the pipeline of new shows (IP creation), to gain presence in new markets and continue expanding its drama footprint. Additionally, management remains focused on areas of efficiency in order to further improve the margin. Fremantle Media’s key brands continue to perform well, and this is expected to remain the case in the coming years.

Fremantle Media continues to build a scalable digital business by expanding capabilities across the value chain and by developing specific new content. Therefore, the increase in the diversity of Fremantle Media’s portfolio has led to an updated business plan confirming an expected slight increase and sustainability of its EBITA margin compared to the most recent levels. The recoverable amount was determined using the fair value less costs of disposal on the basis of the discounted cash flow method with a long-term growth rate of 1.8 percent (previous year: 2.5 percent) and a discount rate of 7.1 percent (previous year: 7.1 percent). As of December 31, 2017, the recoverable amount exceeds the carrying amount by €202 million (previous year: €237 million). In the event of an increase in the discount rate by 0.8 percentage points, a reduction in the annual revenue of 0.9 percent or a reduction in the EBITDA margin by 1.1 percentage points, the recoverable amount is lower than the carrying amount.

Even if breakeven is not expected in the near future, StyleHaul continues to show strong video view and revenue growth, notably in its branded entertainment business. Management sees considerable potential of margin improvement even if StyleHaul is at a rather early stage of its life cycle with uncertainties regarding future development. The recoverable amount was determined using the fair value less costs of disposal on the basis of the discounted cash flow method with a long-term growth rate of 2.0 percent (previous year: 2.0 percent) and a discount rate of 11.1 percent (previous year: 13.9 percent). As of December 31, 2017, the recoverable amount exceeds the carrying amount by €4 million (previous year: €23 million). In the event of an increase in the discount rate by 0.3 percentage points, a reduction in the annual revenue of 0.3 percent or a reduction in the EBITDA margin by 0.4 percentage points, the recoverable amount is lower than the carrying amount.

Other material goodwill was not subject to impairment even given a change by one of the two most important factors: discount rate (increase of 1.0 percentage point) and long-term growth rate (reduction of 1.0 percentage point).