12. Ships, offshore floating assets and other property, plant and equipment (cont’d.) Recoverable amount determined from value-in-use (cont’d.) (iii) Other property, plant and equipment - Revenue are estimated based on existing order book and anticipated future projects. - Gross margins are estimated based on forecast margins for order book, management’s expectation and past experience. - The discount rate reflects specific risk relating to the CGU. The discount rate used is 10.30% (2015: 10.30%). - Cash flow beyond the five-year period is extrapolated using a growth rate of 2.50% (2015: 2.80%). The growth rate is based on published industry research and do not exceed the long-term average growth rate for the industries relevant to the CGU. Recoverable amount determined from fair value less costs of disposal The fair values of ships were determined based on sale price offered by potential buyers. The fair value measurement was categorised as Level 3 fair value as defined in Note 2.3(aa). Impairment of RM4,093,000 (2015:nil) for the Group was recognised using this basis. (c) Following early termination of finance lease contract of two Mobile Offshore Production Units (“MOPUs”) during the financial year, the Group has subsequently reinstated the MOPUs to offshore floating assets at a carrying value of RM160,795,000. Financial Statements 231
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