FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 229 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 21 INTANGIBLE ASSETS (CONTINUED) Company Software RM’000 Intangible asset under development RM’000 Total RM’000 Net book value 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 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 (a) Impairment test for goodwill Goodwill is allocated to the Group’s cash-generating units (CGU) as follows: Group 31.12.2018 31.12.2017 1.1.2017 Sugar business operations in Malaysia 576,240 576,240 576,240 Palm upstream operations in Malaysia 226,795 739,741 739,741 803,035 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 BerhadGroup. 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 covening a three-year period and applying a terminal value growth rate multiple using longer-term sustainable growth rates.