FGV Annual Report 2012

77 F i n a n c i a l S t a t e m e n t s 2 0 1 2 P e n y a t a K e w a n g a n 21 INVESTMENT IN SUBSIDIARIES (continued) (f) Impairment loss on investment in a subsidiary (continued) Financial year ended 31 December 2011 The Group’s investment in a subsidiary, Felda Global Ventures North America Sdn Bhd (“FGVNA”) was tested for impairment due to losses incurred during the financial year. The impairment assessment requires an estimation of the recoverable amount of the cash generating units (“CGU”) owned by FGVNA, in respect of the fatty acid business operation in USA and refined food oil business operation in Canada. The recoverable amount was computed using fair value less cost to sell, with key assumptions that are consistent with the key assumptions used by management to assess the impairment of the CGUs in respect of the fatty acid business operations in USA and refined food oil business operations in Canada as disclosed in Note 20 to the financial statements, other than adjustment for discount rate to reflect equity risk and cash flows being assessed on a profit after interest and tax basis. As a result of the impairment assessment, the Company has recognised an impairment loss of RM743,700,000 which is recorded as an impairment loss in profit or loss against investment in a subsidiary. Based on sensitivity analysis performed by the Company, the impact of 1% increase in the discount rate used, which is a key assumption, will result in additional impairment loss of approximately RM76,000,000. 22 INTERESTS IN ASSOCIATES Goup 2012 2011 RM’000 RM’000 Share of net assets of associates 2,386,306 2,388,197 Company 2012 2011 RM’000 RM’000 Interests in associates, at cost: At 1 January/31 December 1,775,226 1,775,226 Analysed as: Quoted in Malaysia 207,614 207,614 Unquoted in Malaysia 1,567,612 1,567,612 At 31 December 1,775,226 1,775,226 Market value of investment in associate, quoted in Malaysia 530,089 595,313