109 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 CONT’D 15. GOODWILL (Cont’d) 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 (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. (b) Allocation of goodwill The carrying amount of goodwill allocated to the cash-generating units (“CGU”) of the Group is as follows: Group 2022 2021 RM RM e-pay group of companies # 105,629,787 105,629,787 Paysys group of companies ^ 63,009,198 63,009,198 168,638,985 168,638,985 # e-pay group of companies represents e-pay (M) Sdn. Bhd. and its subsidiaries, Mobiepay Sdn. Bhd. and its subsidiaries, S Capital Sdn. Bhd. and Sentripay Sdn. Bhd.. ^ Paysys group of companies represents all subsidiaries of Paysys (M) Sdn. Bhd.. For the purpose of impairment testing, goodwill is allocated to the operating divisions of the Group which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.
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