FGV Audited Financial Statements 2019

116 FGV HOLDINGS BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 23 INTANGIBLE ASSETS (CONTINUED) Company Software RM’000 Intangible asset under development RM’000 Total RM’000 Net book value 2019 At 1 January 2019 20,626 11,438 32,064 Additions 410 1,809 2,219 Amortisation charge (8,872) - (8,872) Reclassification 3,921 (3,921) - At 31 December 2019 16,085 9,326 25,411 2018 At 1 January 2018 20,702 14,197 34,899 Additions 3,468 4,086 7,554 Amortisation charge (7,605) - (7,605) Reclassification 6,845 (6,845) - Write offs (2,784) - (2,784) At 31 December 2018 20,626 11,438 32,064 (a) Impairment test for goodwill Goodwill is allocated to the Group’s cash-generating units (CGU) as follows: Group 2019 RM’000 2018 RM’000 Sugar business operations in Malaysia 576,240 576,240 Palm upstream operations in Malaysia 226,795 226,795 803,035 803,035 (i) Sugar business operations in Malaysia The goodwill relates to the acquisition of the sugar business by the Group and is allocated to MSMH. This represents the lowest level at which goodwill is monitored for internal management purposes. The recoverable amount of the CGU is determined based on VIU calculation using cash flows projections based on financial budgets approved by the Directors covering a three-year period and applying a terminal value growth rate multiple using longer-term sustainable growth rates.