12 Goodwill and other intangible assets

	2021
millions of CHF	Goodwill	Trademarks and licenses	Research and development	Computer software	Customer relationships	Total
Acquisition cost
Balance as of January 1	265.4	78.6	5.6	15.7	237.4	602.7
Additions	–	–	0.5	1.5	–	2.1
Disposals	–	–	–0.0	–0.1	–	–0.1
Currency translation differences	–7.4	–0.1	–0.2	0.7	–5.6	–12.5
Balance as of December 31	258.0	78.5	6.0	17.8	231.8	592.2

Accumulated amortization and impairment losses
Balance as of January 1	–	64.0	4.0	13.3	97.3	178.6
Additions	–	2.9	0.5	1.0	17.7	22.2
Disposals	–	–	–0.0	–0.1	–	–0.1
Impairments	–	–	0.1	–	–	0.1
Currency translation differences	–	–0.3	–0.2	–0.0	–2.1	–2.6
Balance as of December 31	–	66.6	4.5	14.1	113.0	198.3

Net book value
As of January 1	265.4	14.7	1.6	2.4	140.0	424.1
As of December 31	258.0	11.9	1.5	3.7	118.8	393.9

	2020
millions of CHF	Goodwill 1)	Trademarks and licenses	Research and development	Computer software	Customer relationships	Total
Acquisition cost
Balance as of January 1	217.4	69.3	5.5	14.8	208.2	515.2
Acquired through business combination	48.8	9.2	–	0.3	32.0	90.3
Additions	–	0.0	0.1	0.8	–	1.0
Disposals	–	–	–	–0.2	–	–0.2
Currency translation differences	–0.9	0.1	–0.0	–0.0	–2.8	–3.6
Balance as of December 31	265.4	78.6	5.6	15.7	237.4	602.7

Accumulated amortization and impairment losses
Balance as of January 1	–	62.0	3.3	12.7	82.7	160.7
Additions	–	2.0	0.7	0.9	15.7	19.2
Disposals	–	–	–	–0.2	–	–0.2
Impairments	–	–	0.0	–	–	0.0
Currency translation differences	–	0.0	0.0	–0.1	–1.1	–1.2
Balance as of December 31	–	64.0	4.0	13.3	97.3	178.6

Net book value
As of January 1	217.4	7.3	2.2	2.1	125.5	354.5
As of December 31	265.4	14.7	1.6	2.4	140.0	424.1

1) The balance sheet as of December 31, 2020, has been adjusted following the finalization of the valuation of the contingent consideration related to acquisitions in 2020. A reconciliation to the previously published balance sheet is provided in note 4.

Goodwill impairment test

	2021
millions of CHF	Goodwill	Headroom	Growth rate residual value	Pretax discount rate
Healthcare	58.2	1’976.0	2.0%	5.6%
Consumer & Industrial	199.8	855.2	2.0%	5.6%
Total goodwill as of December 31	258.0	2’831.2

	2020
millions of CHF	Goodwill 1)	Headroom	Growth rate residual value	Pretax discount rate
Healthcare	60.5	1’976.0	2.0%	5.6%
Consumer & Industrial	204.9	855.2	2.0%	5.6%
Total goodwill as of December 31	265.4	2’831.2

Goodwill is allocated to the smallest cash-generating unit at which goodwill is monitored for internal management purposes (i.e., business area). The recoverable amount of these units is determined over a five-year cash flow projection period.

The calculation is based on the budget for the first period (2021), the three-year strategic plan for the subsequent two periods (2022–2023), and a management calculation for the next two periods (2024–2025). The budget and the three-year strategic plan were approved by the Sulzer Board of Directors in February 2021. Cash flows beyond the planning period are extrapolated using a terminal value including the growth rates as stated above.

As of December 31, 2021, there is no indication for goodwill impairment. Updating the impairment test would not have resulted in a goodwill impairment.

Sensitivity analyses

The recoverable amount from cash-generating units is measured on the basis of value-in-use calculations significantly impacted by the terminal growth rate used to determine the residual value, the discount rate and the projected cash flows. The table above shows the amount by which the estimated recoverable amount of the CGU exceeds its carrying amount (headroom).

Management determined there are no reasonably possible changes in key assumptions that would result in a goodwill impairment.