82 Dialog Semiconductor Plc | Annual report and accounts 2012  |  Section 4 | Consolidated financial statements and notes Notes to the consolidated financial statements 4. Business combination continued  Impairment Testing Parameters  Sensitivity to changes in assumptions  5. Income taxes Income (loss) before income taxes consists of the following:  Management concluded that no impairment charge against goodwill should be recognised in either of the two strategic business units. However,  although the assumptions concerning the macroeconomic environment and developments in the industries in which Dialog operates and estimates of  the discounted future cash flows are believed to be appropriate, changes in assumptions or circumstances could require changes in the analysis. This  could lead to impairment losses in the future.  When applying the sensitivity parameters described above to the impairment model, it resulted in recoverable amounts of US$777,063,000 and  US$49,203,000 for the Mobile Systems and the Connectivity CGU respectively. With a net book value of assets of US$423,657,000 and allocated  goodwill of US$5,150,000, the strategic business unit Mobile Systems does not exceed its recoverable amount. As for the strategic business unit  Connectivity, the recoverable amount does not exceed the net assets in the amount of US$23,899,000 and the allocated goodwill of US$27,133,000  and could result in an impairment loss of US$1,829,000. Thus, in order to align the recoverable amount to the aggregate carrying amount of net assets  and allocated goodwill, the decrease in future revenue growth and cost of sales must not be greater than 5%.  The sensitivity analysis for the cash-generating units Connectivity and Mobile System, to which goodwill is allocated, was based on a 10% decline in  future revenue growth and cost of sales as well as a less than proportional decrease of other operating expenses. Furthermore, an increase of 1 to 2% in  the weighted average cost of capital was applied. The Company believes that such potential changes are reasonably possible, especially in the long term. Based on the performance of the Connectivity and Mobile System Segment Management did not identify any indications for a goodwill impairment in  2011.  For the year ended 31 December 2012  2012  US$000  2011 US$000 Germany  96,999  60,673 Foreign  (10,874) 749 86,125  61,422 Mobile Systems  Connectivity in %  in % Actual Return on sales  22.0  5.0 Pre-tax discount rate  17.4  17.4 Growth rates  72.2  (12.0) 3 year planning period  Return on sales  24.0 - 28.0  9.0 - 14.0 Pre-tax discount rate  17.4  17.4 Growth rates  10.0 - 36.0  12.0 - 20.0 Perpetual annuity Return on sales  27.0  13.0 Pre-tax discount rate  17.4  17.4 Growth rates  10.0  20.0