GHL System Berhad Annual Report 2017

ANNUAL REPORT 2017 91 NOTES TO THE FINANCIAL STATEMENTS 31 December 2017 CONT’D 12. INTANGIBLE ASSETS (CONTINUED) (cont’d) (a) Intangible assets are initially measured at cost. After initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are assessed for any indication that the asset may be impaired and are amortised on a straight line basis over their estimated economic useful lives, not exceeding ten (10) years. Intangible assets that have an indefinite useful life are tested annually for impairment or more frequently if events or changes in circumstances indicate that the intangible asset might be impaired. (b) Included in the additions of intangible assets of the Group and of the Company are employee benefits capitalised amounting to RM27,991 (2016: RM64,996) and RM27,991 (2016: RM64,996) respectively. 13. GOODWILL Group 2017 2016 RM RM Cost At beginning/end of financial year 108,597,816 108,597,816 Accumulated impairment losses At beginning/end of financial year (2,968,029) (2,968,029) Net carrying amount 105,629,787 105,629,787 (a) Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost. After initial recognition, goodwill is measured at cost less accumulated impairment losses. The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the present value of those cash flows. (b) Allocation of goodwill The carrying amount of goodwill allocated to the cash-generating units (“CGU”) of the Group is as follows: Group 2017 2016 RM RM e-pay group of companies 105,629,787 105,629,787 e-pay group of companies represents all subsidiaries of e-pay (M) Sdn Bhd. For the purpose of impairment testing, goodwill is allocated to the operating divisions of the Group which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.