Registration No. 200301030845 (633265-K) - 97 - 10. Intangible Assets (Cont’d) (a) Description of the intangible assets Brand Brand relates to the Techno Fibre Companies brand name of which the fair value of the acquired brand name was established using a form of income approach known as Relief-From-Royalty (“RFR”) method of which an independent valuation specialist had been engaged by the Group to value the brand name as part of the purchase price allocation exercise on the acquisition of the Techno Fibre Companies. The brand was fully impaired in the financial period ended 2019 when the recoverable amount arising from value in use determined by discount future cash flows was lower than the carrying amount. Development costs 1. Product technology Product technology relates to the Group's new technology on the production of hyperbaric lifeboat. Due to the increased industry regulation and demand for hyperbaric lifeboats, the acquired subsidiary saw a potential for such market and hence had spent two years to develop the new technology. As part of the purchase price allocation exercise on the acquired subsidiary, the Group engaged an independent valuation specialist to value the product technology by using the cash flows projections i.e. multi-period excess earnings method ("MEEM"). 2. Development costs Development costs related to the boats production which consist of license fees, certification fees, review fee on design, interests and workshop costs. (b) Impairment testing for cash generating units (“CGU”) containing goodwill For impairment testing, goodwill is allocated to the Group’s subsidiaries which represent the lowest level of CGU level within the Group at which the goodwill is monitored for internal management proposes. The goodwill allocated to each CGU is impaired during the financial period when the recoverable amount from value in use is higher than the carrying amount. NOTES TO THE FINANCIAL STATEMENTS 174 DESTINI BERHAD ANNUAL REPORT 2024
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