Ericsson: Impairment Testing Results In SEK 14.2 Bln Write-down - Quick Facts

(RTTNews) - Ericsson (ERIC) announced that the impairment testing that was announced in conjunction with the restated financials according to new segment structure on December 8, 2017, is completed. The result of the impairment testing is a write-down of 14.2 billion Swedish kronor. The company said the majority of goodwill originates from investments made 10 years ago or more, and has limited relevance for Ericsson's business going forward. All impairments are non-cash accounting adjustments.

The company also reported that the lowering of the U.S. corporate income tax rate from 35% to 21% (effective 1 January 2018) requires a revaluation of U.S. deferred tax assets. The current estimated impact will be a non-cash charge to the Group income statement of approximately 1.0 billion kronor that will impact income tax expenses.

The company noted that the impairments and the tax asset revaluation will impact reported net income in the fourth quarter of 2017, but have no impact on Ericsson's cash flow and cash position in the fourth quarter.