14. Intangible assets (cont’d.) The other intangible assets relate to the fair value at the date of acquisition of time charter hire contracts arising from acquisition of a subsidiary, and are amortised over the remaining charter period. As a result of the early termination of certain time charter contracts, the other intangible assets amounting to RM54,631,000 has been written off in the current financial year. The addition in the other intangible assets amounting to RM47,453,000 relates to the fair value, at the date of acquisition, of long term customer contracts from acquisition of PETRONAS Maritime Services Sdn. Bhd. (“PMSSB”) to be amortised over the remaining contract periods. Impairment test for goodwill (a) Impairment loss recognised The Group performed a review on the recoverable amount of goodwill during the financial year. Generally, the recoverable amounts are based on the higher of fair value less cost to sell or value-in-use for the CGUs to which the goodwill is allocated. In determining value-in-use for the CGUs, the cash flows were discounted at rates determined by management on a pre-tax basis. Based on this review, no impairment loss was recognised by the Group (2015: RM160,176,000). (b) Allocation of goodwill Goodwill has been allocated to the Group’s CGUs identified according to business segment as follows: Group 2016 2015 RM’000 RM’000 Petroleum 895,563 857,521 Offshore 225 223 Others 720 870 896,508 858,614 (c) Key assumptions used in value-in-use calculations The recoverable amount of a CGU is determined using the value-in-use method, based on cash flow projections derived from financial projections approved by the management covering a five-year period. The discount rate used is based on the pre-tax weighted average cost of capital determined by the management. MISC BERHAD • Annual Report 2016 234 notes to the financial statements - 31 december 2016
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