GHL System Berhad Annual Report 2020

116 G H L S y s t e m S B e r h a d 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 CONT’D 15. GOODWILL Group Balance as at 1.1.2020 Impairment during the year Balance as at 31.12.2020 RM RM RM Carrying amount Goodwill 179,971,237 (11,332,252) 168,638,985 Group As at 31.12.2020 Cost Accumulated impairment Carrying amount RM RM RM Goodwill 171,607,014 (2,968,029) 168,638,985 Group Balance as at 1.1.2019 Acquisitions of subsidiary (Note 16) Balance as at 31.12.2019 RM RM RM Carrying amount Goodwill 168,638,985 11,332,252 179,971,237 Group As at 31.12.2019 Cost Accumulated impairment Carrying amount RM RM RM Goodwill 182,939,266 (2,968,029) 179,971,237 (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.