The negative effects of the financial crisis on the Belarusian economy have led to a material devaluation of the Belarusian Ruble of 31% since December 31, 2008, resulting in lower expected cash flow generation and lower growth assumptions and consequently in a reduction in value-in-use. Key assumptions applied in the respective value-in-use calculation for Velcom are discount rates after tax (WACC) of 18.9% declining to 10.7% for the terminal value (pre-tax 24.9% declining to 14.0%). Therefore an impairment charge in the amount of EUR 290.0 million for the goodwill from the acquisition of Velcom in Belarus was recorded.
Additionally an impairment charge for the license of Vip mobile in the Republic of Serbia in the amount of EUR 62.0 million was recorded as a result of lower than expected growth due to the economic downturn.