FGV Annual Report 2017

ANNUAL INTEGRATED REPORT 2017 FINANCIAL STATEMENTS 213 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 20 INTANGIBLE ASSETS (CONTINUED) Company Software RM’000 Intangible asset under development RM’000 Total RM’000 Net book value 2017 At 1 January 2017 17,895 15,148 33,043 Additions 10 9,229 9,239 Amortisation charge (7,383) - (7,383) Reclassification 10,180 (10,180) - At 31 December 2017 20,702 14,197 34,899 2016 At 1 January 2016 23,936 3,858 27,794 Additions 186 11,290 11,476 Amortisation charge (6,227) - (6,227) At 31 December 2016 17,895 15,148 33,043 (a) Impairment test for goodwill Goodwill is allocated to the Group’s cash-generating units (CGU) as follows: Group 2017 RM’000 2016 RM’000 Sugar business operations in Malaysia 576,240 576,240 Palm upstream operations in Malaysia 739,741 739,741 1,315,981 1,315,981 (i) Sugar business operations in Malaysia The goodwill relates to the acquisition of the sugar business by the Group and is allocated to MSM Holdings Berhad Group. 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.