GHL System Berhad Annual Report 2018

a n n u a l r e p o r t 2 0 1 8 97 NOT ES TO THE F I NANC I A L STAT EMENTS 3 1 D e c e m b e r 2 0 1 8 C O N T ’ D 13. INTANGIBLE ASSETS (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 RM21,230 (2017: RM27,991) and RM21,230 (2017: RM27,991) respectively. 14. GOODWILL Group Balance as at 1.1.2018 Acquisitions of subsidiaries (Note 15) Balance as at 31.12.2018 RM RM RM Carrying amount Goodwill 105,629,787 63,009,198 168,638,985 As at 31.12.2018 Cost Accumulated impairment Carrying amount Group RM RM RM Goodwill 171,607,014 (2,968,029) 168,638,985 Group Balance as at 1.1.2017/ 31.12.2017 RM Carrying amount Goodwill 105,629,787 As at 31.12.2017 Cost Accumulated impairment Carrying amount Group RM RM RM Goodwill 108,597,816 (2,968,029) 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.