Goodwill and intangible assets

12 Months Ended

Dec. 31, 2024

Intangible assets and goodwill [abstract]

Goodwill and intangible assets

4.1. Goodwill and intangible assets

Accounting policies

Intangible assets acquired separately are measured on

initial recognition at cost. Internally generated intangibles,

except for development costs that may be capitalized, are

expensed as incurred. Development costs are capitalized

only if Nokia has the technical feasibility to complete the

asset; has an ability and intention to use or sell the asset;

can demonstrate that the asset will generate future

economic benefits; has resources available to complete

the asset; and has the ability to measure reliably the

expenditure during development.

The useful life of Nokia’s intangible assets, other than

goodwill, is finite. Following initial recognition, finite

intangible assets are carried at cost less accumulated

amortization and accumulated impairment losses. Intangible

assets are amortized over their useful lives, generally three

years to ten years, using the straight-line method, which is

considered to best reflect the pattern in which the asset’s

future economic benefits are expected to be consumed.

Depending on the nature of the intangible asset, the

amortization charges for continuing operations are included

in cost of sales, research and development expenses or

selling, general and administrative expenses.

Goodwill is allocated to the cash-generating units or groups

of cash-generating units that are expected to benefit from

the synergies of the related business combination and that

reflect the lowest level at which goodwill is monitored for

internal management purposes. A cash-generating unit, as

determined for the purposes of Nokia’s goodwill impairment

testing, is the smallest group of assets generating cash

inflows that are largely independent of the cash inflows

from other assets or groups of assets. The carrying value

of a cash-generating unit includes its share of relevant

corporate assets allocated to it on a reasonable and

consistent basis. When the composition of one or more

groups of cash-generating units to which goodwill has been

allocated is changed, the goodwill is reallocated based on

the relative fair value of the affected groups of cash-

generating units.

Nokia tests the carrying value of goodwill for impairment

annually. In addition, Nokia assesses the recoverability of the

carrying value of goodwill and intangible assets if events

or changes in circumstances indicate that the carrying value

may be impaired. Factors that Nokia considers when it

reviews indications of impairment include, but are not

limited to, underperformance of the asset relative to its

historical or projected future results, significant changes

in the manner of using the asset or the strategy for the

overall business, and significant negative industry or

economic trends.

Nokia conducts its impairment testing by determining the

recoverable amount for an asset, a cash-generating unit or

groups of cash-generating units. The recoverable amount

of an asset, a cash-generating unit or groups of cash-

generating units is the higher of its fair value less costs of

disposal and its value-in-use. The recoverable amount is

compared to the asset’s, cash-generating unit’s or groups

of cash-generating units’ carrying value. If the recoverable

amount for the asset, cash-generating unit or groups of

cash-generating units is less than its carrying value, the

asset is considered impaired and is written down to its

recoverable amount. Impairment losses are presented

in cost of sales, research and development expenses or

selling, general and administrative expenses, except for

impairment losses on goodwill, which are presented in

other operating expenses.

EURm	Goodwill	Intangible assets	Total
2024
Acquisition cost at 1 January	6 629	9 893	16 522
Additions	—	97	97
Acquisitions through business combinations	33	—	33
Assets held for sale	(38)	(170)	(208)
Disposals and retirements	(11)	(282)	(293)
Translation differences	260	255	515
Acquisition cost at 31 December	6 873	9 793	16 666
Accumulated amortization and impairment charges at 1 January	(1 125)	(8 807)	(9 932)
Amortization	—	(390)	(390)
Assets held for sale	—	165	165
Disposals and retirements	—	278	278
Translation differences	(12)	(237)	(249)
Accumulated amortization and impairment charges at 31 December	(1 137)	(8 991)	(10 128)
Net book value at 1 January	5 504	1 086	6 590
Net book value at 31 December	5 736	802	6 538
2023
Acquisition cost at 1 January	6 799	9 778	16 577
Additions	—	299	299
Disposals, retirements and assets held for sale	(22)	(23)	(45)
Translation differences	(148)	(161)	(309)
Acquisition cost at 31 December	6 629	9 893	16 522
Accumulated amortization and impairment charges at 1 January	(1 132)	(8 515)	(9 647)
Amortization	—	(423)	(423)
Impairment	—	(26)	(26)
Disposals and retirements	—	17	17
Translation differences	7	140	147
Accumulated amortization and impairment charges at 31 December	(1 125)	(8 807)	(9 932)
Net book value at 1 January	5 667	1 263	6 930
Net book value at 31 December	5 504	1 086	6 590

Net book value of intangible assets by type of asset

EURm	2024	2023
Customer relationships	317	605
Patents and licenses	304	316
Technologies and IPR&D	12	31
Tradenames and other	51	60
Intangible assets under construction	118	74
Total	802	1 086

At 31 December 2024, the weighted average remaining

amortization period is approximately one year for customer

relationships, six years for patents and licenses, one year for

technologies and IPR&D, and three years for tradenames

and other.

Goodwill

Nokia has allocated goodwill to its operating segments

corresponding to groups of cash-generating units (CGUs) that

are expected to benefit from goodwill. Refer to Note 2.2.

Segment information.

Allocation of goodwill

The following table presents the allocation of goodwill to

groups of CGUs at 31 December:

EURm	2024	2023
Network Infrastructure	2 831	2 739
Mobile Networks	2 346	2 228
Cloud and Network Services	559	537

Recoverable amounts

The recoverable amounts of the groups of CGUs in 2024 were

based on value-in-use that was determined using a discounted

cash flow calculation. The cash flow projections approved by

management were based on financial plans covering a forecast

period of three years followed by a seven-year period that

reflects management’s expectations of recovery from the

market-driven mid-term decrease in sales and market

cyclicality, especially in the Mobile Networks group of CGUs,

that then converge to the steady state cash flow projection

modelled in the terminal year. The terminal growth rate

assumptions do not exceed long-term average growth rates

for the industries and economies in which the groups of

CGUs operate.

The discount rates reflect current assessments of the time

value of money and relevant market risk premiums considering

risks and uncertainties for which the future cash flow estimates

have not been adjusted. Discounted cash flow projections are

based on post-tax cash flows and post-tax discount rates,

which do not materially differ from the pre-tax basis

discounted cash flow projections. Other key variables in future

cash flow projections include assumptions on estimated sales

growth, gross margin and operating margin.

Sales growth and gross margin assumptions reflect

management expectations of addressable market growth,

market share and competitive position, as well as Nokia’s

strategy and long-term business outlook. Gross margin and

operating margin assumptions include the impact of the

ongoing transformational and cost savings initiatives, which

are expected to reduce cost base and increase operational

efficiency especially within Mobile Networks.

Terminal growth rate and post-tax discount rate applied in the

impairment test for the groups of CGUs:

	Terminal growth rate		Post-tax discount rate
Key assumption %	2024	2023	2024	2023
Network Infrastructure	1.5%	1.0%	9.4%	9.3%
Mobile Networks	1.0%	1.0%	8.4%	8.3%
Cloud and Network Services	1.5%	1.0%	8.0%	7.7%

The results of the impairment testing indicate adequate

headroom for each group of CGUs in 2024.