m) Amortization of goodwill
Under IFRS, goodwill was previously amortized over its estimated useful life. The amended IAS 38 “Intangible assets”, which became effective for Metso as of January 1, 2004, reclassified goodwill and certain other intangible assets, such as brand names, as intangible assets having indefinite economic lives.
Under U.S. GAAP, goodwill and certain intangible assets having indefinite lives are no longer subject to amortization after January 1, 2002, with the exception of goodwill related to acquisitions between June 30, and December 31, 2001, which was never amortized.
In the year ended December 31, 2006 Metso Paper wound up a business, which was unrelated to its other ongoing businesses. The related goodwill was written off. Under U.S. GAAP the charge from the liquidation was €1 million more than under IFRS due the non amortization of goodwill in 2002 and 2003.
Last updated May 23, 2009