114 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 15. GOODWILL Group 2021 Balance as at 1.1.2021 Impairment during the financial year Balance as at 31.12.2021 RM RM RM Carrying amount Goodwill 168,638,985 - 168,638,985 As at 31.12.2021 Group Cost Accumulated impairment losses Carrying amount RM RM RM Goodwill 171,607,014 (2,968,029) 168,638,985 Group 2020 Balance as at 1.1.2020 Impairment during the financial year Balance as at 31.12.2020 RM RM RM Carrying amount Goodwill 179,971,237 (11,332,252) 168,638,985 As at 31.12.2020 Group Cost Accumulated impairment losses Carrying amount RM RM RM Goodwill 171,607,014 (2,968,029) 168,638,985 (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. Goodwill is tested for impairment by the Group at least on an annual basis, and whenever there is an indication that the goodwill may be impaired. 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.
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