Stora Enso - Annual Report 2004 > Financials > Notes > Note 10 Depreciation, Amortisation and Fixed Asset Impa

Note 10 Depreciation, Amortisation and Fixed Asset Impa

Year Ended 31 December

EUR million 2002 2003 2004

Depreciation and Amortisation

Intangible fixed assets 16.4 17.0 20.2

Buildings and structures 98.0 109.3 112.9

Plant and equipment 932.5 904.9 910.8

Other tangible fixed assets 42.6 25.1 23.9

Goodwill 148.8 116.1 90.2

Total 1 238.3 1 172.4 1 158.0

Impairment and disposal losses

Plant and equipment 267.3 12.1 14.0

Other fixed assets 17.4 15.9 -

Goodwill 918.9 - -

Total 1 203.6 28.0 14.0

Depreciation, Amortisation and Impairment Charges 2 441.9 1 200.4 1 172.0

Total depreciation, amortisation and impairment charges in the Income Statement amounted EUR 1 172.0 (EUR 1 200.4) million against which there are capital gains on the disposal of fixed assets, shown in Other Operating Income, amounting to EUR 113.0 (EUR 12.3) million, principally relating to land and a few buildings. The main part of the capital gain in 2004 related to the Group’s divestment of its Swedish forest holdings company, Bergvik Skog AB (see Note 4), which generated a capital gain of SEK 978 (EUR 107.3) million on the fixed assets therein.

In December 2003 the Group contracted to sell its forestlands in Ontario, Canada, simultaneously writing down the asset by EUR 17.6 million. In 2002 net losses on the disposal of fixed assets amounted to EUR 42.4 million, whilst capital gains on the disposal of fixed assets amounted to EUR 79.6 million, principally relating to the sale of US forests and other land.

In September 2002, as a result of weakened market conditions in North America, the Group’s North American assets were subject to impairment in the sum of USD 1 081.0 (EUR 1 143.3) million, of which USD 868.8 (EUR 918.9) million related to goodwill; the value of the remaining Stora Enso North America Inc goodwill at 31 December 2002 amounted to USD 645.9 (EUR 615.9) million, to be amortised over a further 17 years. The impairment was calculated with a discount rate of 9.5% using the Value in Use method for each cash generating unit, the resulting charges relating to the segments as to EUR 1 014.5 million for Magazine Paper and EUR 128.8 million for Fine Paper. In addition, as a result of the North American Profit Enhancement Programme, a further USD 50.0 (EUR 52.9) million impairment charge was made to restructure selected manufacturing assets.