5.1  SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS PURCHASE PRICE ALLOCATION  TRADEMARKS  SECTION 5.1  Acquisition of subsidiaries For acquisitions of entities, the assets, liabili- ties and contingent liabilities of the acquiree  are recognised using the acquisition method.  The most significant assets acquired generally  comprise goodwill, trademarks, non-current  assets, receivables and inventories.  No active market exists for the majority of the  acquired assets and liabilities, in particular in  respect of acquired intangible assets. Accord- ingly, management makes estimates of the  fair value of acquired assets, liabilities and  contingent liabilities. Depending on the nature  of the item, the determined fair value of an  item may be associated with uncertainty and possibly adjusted subsequently. The unallocated purchase price (positive  amount) is recognised in the statement  of financial position as goodwill, which is  allocated to the Group’s cash-generating  units. Management makes estimates of the  acquired cash-generating units, the cash-  generating units that already existed in the  Group and the allocation of goodwill. The allocation of goodwill is based on the  expected future cash flows for each activity.  In each business combination, management  decides whether or not to recognise goodwill  related to non-controlling interests. If such  goodwill is recognised, it is estimated based  on the fair value of the non-controlling inter- ests less the non-controlling interests’ share  of the fair value of acquired assets, liabilities  and contingent liabilities. The fair value of the  non-controlling interests is estimated based  on the net present value of expected future  cash flows from the entity, the cost of newly  acquired shareholdings in the entity excluding  a control premium paid, and other fair value  models as applicable for the transaction.  In a step acquisition, the Group gains control  of an entity in which the Group already held  a shareholding immediately before the step  acquisition. Management estimates the total  fair value of the shareholding in the entity  held immediately after the completion of  the step acquisition. The estimated total fair  value is accounted for as the cost of the total  shareholding in the entity. The shareholding  held immediately before the step acquisition  is remeasured at fair value at the acquisition  date. The fair value is calculated as the esti- mated total fair value less the fair value of the  consideration paid for the shareholdings ac- quired in the step acquisition and the fair value  of non-controlling interests. The resulting gain  or loss on the remeasurement is recognised in  the income statement under special items. The total fair value is based on various  valuation methods, including the net present  value of expected future cash flows from the  entity, the cost of newly acquired sharehold- ings in the entity including a control premium  paid, and other fair value models as applic- able for the transaction. The net present value of expected future cash  flows (value in use) is based on budgets and  business plans for the next three years and  projections for subsequent years as well as  management’s expectations for the future  development following gain of control of the  business. Key parameters are revenue growth,  operating margin, future capital expenditure  and growth expectations beyond the next  three years. Budgets and business plans for  the next three years are based on concrete  commercial initiatives. Projections for the fol- lowing years (up to seven years) are based on  more general expectations and risks for the  entity and assumptions about the market in  which it operates. As the risk associated with  cash flows is not included in the expected  cash flows for newly acquired entities, the ex- pected future cash flows are discounted using  a WACC rate, cf. the description below. Management believes that the purchase price  accounted for in the consolidated financial  statements reflects the best estimate of the  total fair value of the business and the fair  value of the non-controlling interests, and  hence the allocation of goodwill to controlling  and non-controlling interests. The value of the trademarks acquired and  their expected useful life are assessed based on the trademarks’ market posi- tion, expected long-term developments in  the relevant markets and the trademarks’  profitability. The estimated value of acquired  trademarks includes all future cash flows  associated with the trademarks, including  the value of customer relations etc. related  to the trademarks. For most entities ac- quired there is a close relationship between  trademarks and sales. Consumer demand for  beer and other beverages drives sales, and  therefore the value of a trademark is closely  linked to consumer demands, while there  is no separate value attached to customers  (shops, bars etc.) as their choice of products  is driven by consumer demand. Management determines the useful life for  each trademark based on its relative local,  regional and global market strength, market  share and the current and planned market- ing efforts which are helping to maintain and  increase the value of the trademark. When  the value of a well-established trademark is  expected to be maintained for an indefinite  period in the relevant markets, and these  Consolidated financial statements SECTION 5: ACQUISITIONS AND ASSOCIATES 107 Carlsberg Group Annual Report 2013