The Group performs its goodwill impairment test at least annually in December and when circumstances indicate the carrying value may be impaired. The Group’s impairment test for goodwill is based on fair value less cost of disposal calculations. The key assumptions used to determine the recoverable amount for the different operating segments were disclosed in the annual consolidated financial statements for the year ended 31 December 2016.

Contrary to historical growth trends and the expectations that we had at the end of 2016 based on the information then available, our Consumer Sports business faced difficult market circumstances. In the first quarter revenues were broadly in line with expectations but this significantly deteriorated in the course of the second quarter, resulting in an unanticipated year on year decline in revenue. As a result of these developments we are reviewing strategic options for our Sports business.

These adverse developments triggered us to perform an impairment test on 30 June 2017 for our Consumer operating segment. The other operating segments being Automotive, Licensing and Telematics are performing in line with expectations and hence no triggering event was identified.

Consistent with the approach in our year end impairment testing, the recoverable amount of the Consumer segment was determined based on fair value less costs of disposal method as this resulted in a higher recoverable amount than the value in use. The calculations of fair value less costs of disposal are based on post-tax cash flow projections which amongst others reflect our latest estimates of the declining Sports revenue, and a post-tax discount rate of 9% (31 December 2016: 9%). The financial forecast covers a period of ten years and incorporates assumptions on the expected revenue developments, gross margin and operating margin after allocation of operating expenses from shared units, taking into account management's expectation of further developments and plans. We do not expect material cash flows beyond the forecasted period and hence these have not been forecasted. All other assumptions remained consistent with those disclosed in the annual financial statements for the year ended 31 December 2016.

As a result of this analysis, management recognised an impairment charge of €169 million against goodwill, which results in a full write off of the goodwill of the Consumer operating segment. The impairment charge is recorded as a separate line item within operating expenses.

6. Shareholders’ equity