27 Depreciation, amortization and impairment losses

The following table provides a breakdown of depreciation, amortization and impairment losses:

Impairment losses break down as follows:

Depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets increased by EUR 1.7 billion year-on-year to EUR 27.5 billion. Amortization of intangible assets remained unchanged at EUR 6.5 billion, depreciation of property, plant and equipment increased by EUR 1.1 billion to EUR 14.6 billion, while depreciation of right-of-use assets increased by EUR 1.1 billion to EUR 6.2 billion. These increases are all largely due to the first-time inclusion of Sprint for the full year. In addition, in the United States operating segment, a reduction in the useful life of leased network technology for cell sites following the business combination of T‑Mobile US and Sprint increased depreciation of the corresponding right-of-use assets by EUR 0.8 billion. By contrast, depreciation and amortization were reduced by EUR 0.2 billion overall in connection with non-current assets and disposal groups held for sale and the associated suspension of depreciation and amortization. This primarily related to T‑Mobile Netherlands and Telekom Romania Communications.

Impairment losses decreased by EUR 0.8 billion year-on-year to EUR 0.3 billion. In 2020, impairment losses on goodwill resulting from year-end impairment tests related to the Montenegro cash-generating unit. EUR 0.5 billion of the impairment losses in 2020 resulted from an ad hoc impairment test of assets assigned to the Systems Solutions cash-generating unit and related to intangible assets and property, plant and equipment in the Systems Solutions operating segment and in the Group Headquarters & Group Services segment. EUR 0.2 billion of this was attributable to another ad hoc impairment test in 2020 of the assets assigned to the Romania cash-generating unit. This also related to intangible assets and property, plant and equipment. Impairment losses recognized in the reporting year on intangible assets and property, plant and equipment totaled EUR 0.2 billion. This was a consequence of several factors, including the ad hoc impairment testing carried out in the Systems Solutions cash-generating unit in the prior year and related to follow-up investments in the reporting year. In addition, despite the marginal improvement in the business outlook, the increase in the cost of capital in the reporting year prompted further impairment losses to be recognized on non-current assets in the Systems Solutions cash-generating unit at the end of 2021.

For further information, please refer to Notes 6 “Intangible assets,” 7 “Property, plant and equipment,” and 8 “Right-of-use assets – lessee relationships.”