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Note 17 Goodwill

Note 17 Goodwill

The following table provides details about the changes in the carrying amounts of goodwill for the years ended December 31, 2016 and 2015. BCE’s groups of CGUs correspond to our reporting segments.

  BELL
WIRELESS
  BELL
WIRELINE
  BELL
MEDIA
 

BCE

 

Balance at January 1, 2015

2,302   3,491   2,592   8,385  

Acquisitions and other

1     (9 ) (8 )

Balance at December 31, 2015

2,303   3,491   2,583   8,377  

Acquisitions and other

1   340   240 581

Balance at December 31, 2016

2,304   3,831   2,823   8,958  

 

 

Impairment testing

As described in Note 2, Significant accounting policies, goodwill is tested annually for impairment by comparing the carrying value of a CGU or group of CGUs to the recoverable amount, where the recoverable amount is the higher of fair value less costs of disposal or value in use.

VALUE IN USE

The value in use for a CGU or group of CGUs is determined by discounting five-year cash flow projections derived from business plans reviewed by senior management. The projections reflect management’s expectations of revenue, segment profit, capital expenditures, working capital and operating cash flows, based on past experience and future expectations of operating performance.

Cash flows beyond the five-year period are extrapolated using perpetuity growth rates. None of the perpetuity growth rates exceed the long-term historical growth rates for the markets in which we operate.

The discount rates are applied to the cash flow projections and are derived from the weighted average cost of capital for each CGU or group of CGUs.

The following table shows the key assumptions used to estimate the recoverable amounts of the groups of CGUs.

GROUPS OF CGUs

ASSUMPTIONS USED  
PERPETUITY
GROWTH RATE
 

DISCOUNT RATE

Bell Wireless

0.8 % 9.1 %

Bell Wireline

1.0 % 6.0 %

Bell Media

1.0 % 8.5 %

We believe that any reasonable possible change in the key assumptions on which the estimate of recoverable amounts of the Bell Wireless or Bell Wireline groups of CGUs is based would not cause their carrying amounts to exceed their recoverable amounts.

For the Bell Media group of CGUs, a decrease of (0.4%) in the perpetuity growth rate or an increase of 0.3% in the discount rate, would have resulted in its recoverable amount being equal to its carrying value.

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