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27 Depreciation, amortization and impairment losses

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

millions of €

 

 

 

 

2021

2020

2019

Amortization and impairment of intangible assets

6,623

6,997

4,806

Of which: impairment losses

155

525

74

Of which: impairment losses on mobile licenses

4

152

0

Of which: amortization of mobile licenses

606

1,140

1,080

Depreciation and impairment of property, plant and equipment

14,687

13,706

9,208

Of which: impairment losses

92

210

319

Depreciation and impairment of right-of-use assets

6,171

5,126

3,649

Of which: impairment losses

37

63

0

 

27,482

25,829

17,663

Impairment losses break down as follows:

millions of €

 

 

 

 

2021

2020

2019

Intangible assets

155

525

74

Of which: goodwill from the year-end impairment test

0

26

0

Of which: in connection with the ad hoc impairment test in the Systems Solutions cash-generating unita

140

343

n.a.

Of which: in connection with the ad hoc impairment test in the Romania cash-generating unit

0

126

24

Property, plant and equipment

92

210

319

Of which: in connection with the ad hoc impairment test in the Systems Solutions cash-generating unit

60

127

0

Of which: in connection with the ad hoc impairment test in the Romania cash-generating unit

0

34

296

Of which: from the year-end impairment test

0

0

0

Right-of-use assets

37

63

0

 

284

798

393

a

Of the impairment losses, EUR 21 million (2020: EUR 44 million) relates to intangible assets in the Group Headquarters & Group Services segment that are subject to use by the Systems Solutions operating segment and are allocated to the Systems Solutions cash-generating unit for the purposes of impairment testing.

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.”