Fiscal 2020 Universal Registration Document

6.3.3 Net book value of property, plant and equipment

(in millions of euro)	BUILDINGS	PLANT AND EQUIPMENT	CONSTRUCTION IN PROGRESS AND OTHER	TOTAL
Net carrying amount as of August 31, 2018	Net carrying amount as of August 31, 2018 BUILDINGS 47	Net carrying amount as of August 31, 2018 PLANT AND EQUIPMENT 492	Net carrying amount as of August 31, 2018 CONSTRUCTION IN PROGRESS AND OTHER 80	Net carrying amount as of August 31, 2018 TOTAL 619
Net carrying amount as of August 31, 2019	Net carrying amount as of August 31, 2019 BUILDINGS 68	Net carrying amount as of August 31, 2019 PLANT AND EQUIPMENT 535	Net carrying amount as of August 31, 2019 CONSTRUCTION IN PROGRESS AND OTHER 81	Net carrying amount as of August 31, 2019 TOTAL 684
Net carrying amount as of August 31, 2020	Net carrying amount as of August 31, 2020BUILDINGS49	Net carrying amount as of August 31, 2020PLANT AND EQUIPMENT446	Net carrying amount as of August 31, 2020CONSTRUCTION IN PROGRESS AND OTHER72	Net carrying amount as of August 31, 2020TOTAL566

6.4 Impairment of non-current assets

ACCOUNTING PRINCIPLES AND POLICIES

Impairment of assets with finite useful lives

Property, plant and equipment and intangible assets with finite useful lives are tested for impairment if there is any indication of impairment. Impairment charges are recognized in the income statement, and may be reversed subsequently.

Impairment of assets with indefinite useful lives

Goodwill and other intangible assets considered to have an indefinite useful life (such as certain trademarks) are tested for impairment whenever there is an indication of impairment, and at least annually, in the last quarter of the fiscal year. The results of the impairment tests are then confirmed using actual data as of August 31.

Cash Generating Units

Assets that do not generate cash inflows that are largely independent of those from other assets, and hence cannot be tested for impairment individually, are grouped together in Cash Generating Units (CGUs).

Impairment tests are performed at the level of the CGU or group of CGUs corresponding to the lowest level at which goodwill is monitored by the Group.

Goodwill is generally analyzed per operating segment, as reflected in the Group’s organizational structure (see note 4.1):

On-site Services activity:
- Business & Administrations, which includes Corporate Services, Energy & Resources, Government & Agencies, Sports & Leisure and other non-segmented activities,
- Healthcare, combined with Seniors,
- Education, comprising Schools and Universities;
the Benefits & Rewards Services activity corresponds to a single CGU.

Goodwill is not tested for impairment at a higher level than the operating segments before aggregation for segment reporting.

The assets allocated to each CGU or group of CGUs comprise:

goodwill, which is allocated when the CGU or group of CGUs is likely to benefit from the business combination;
other intangible assets, property, plant and equipment, client investments and net working capital.

Indications of impairment

The main indicators that a CGU or group of CGUs may be impaired are a significant decrease in the CGU’s or group of CGUs’ revenues and underlying operating profit or material changes in market trends.

Methods used to determine the recoverable amount

An impairment charge is recognized in the income statement when the carrying amount of an asset or CGU or group of CGUs is greater than its recoverable amount.

Recoverable amount is the greater of:

fair value less costs of disposal, i.e., the amount obtainable from the sale of an asset (net of selling costs) in an orderly transaction between market participants at the measurement date; and
value in use, which is the present value of the future cash flows expected to be derived from continuing use and ultimate disposal of the asset or CGU or group of CGUs.

The value in use of a CGU or group of CGUs is estimated using after-tax cash flow projections based on business plans and a terminal value calculated by extrapolating data for the final year of the business plan. Business plans generally cover one to five years.