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Telefónica, S.A Message Board

  • rogerwenman rogerwenman May 1, 2012 1:06 PM Flag

    Balance Sheet questions

    1. How can "Goodwill" and the intangibles increase from one year to the next?

    2. What happened to the stockholders details after 2008? All Yahoo shows are "-"s.


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    • I read it too.thks.

    • The 4th qtr 2011 report says on page 10:

      "Consolidated operating expenses stood at 44,501 million euros in 2011. It is important to remember that the year-on-year performance in reported terms (+10.2%) is mainly affected by the increase in personnel expenses (+31.8% year-on-year in reported terms), as a result of:

      1) non-recurrent restructuring expenses recorded in the second half of 2010 (1,262 million euros), mainly related to personnel reorganization (658 million euros) and firm commitments relating to the Telefónica Foundation’s social activities (400 million euros; of this total, 280 million euros
      were recorded in Telefónica S.A. and the remainder was registered in Telefónica Latinoamérica).

      2) the non-cash impact provision for restructuring expenses (2,671 million euros in consolidated terms) register in the third quarter of 2011, associated to the workforce restructuring plan approved by the Company in Spain."

      I've not gone into the footnotes and did the author of the article. The full annual financial statements for 2011 are due out on May 11th.

    • Goodwill is an accounting concept meaning the value of an entity over and above the value of its assets. The term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets, resulting perhaps because the reputation the firm enjoyed with its clients. It is basically a unsupportable or rather ficticious number.

      • 2 Replies to dimage54
      • Yes,indeed.And since the term "prudent value" is rather obscure and confusing,nowdays corporations are compelled to inquire in annual basis through a standard test if the value of the goodwill holds(performing assets)or if the assets involved are not performing as planned(an annual test is a must)and in this case a writedown should be performed in annual basis to approximate the purchased non performing-assets to a more realistic value.


    • Goodwill can increase if another asset is purchased like an investment in another company or even large equipment in excess of what its recorded value is.

    • I guess they can increase when you buy another asset under its current book value.

      I think that intangibles increased in 2010 due to the adquisition of Portugal Telecom.Whaever is accounted over the book value in the agreed purchase price would be registred under "intangibles"-That is not necessary bad ,the problem arises if the assets you bought are not performing well in which case you would have to writedown the Goodwill up to the real value of the asset.


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