3. Significant accounting judgements, estimates and assumptions (cont’d.) (a) Property development revenue (cont’d.) Significant judgement is required in determining the stage of compleঞon, the extent of the costs incurred and the esঞmated total revenue and costs, as well as recoverability of the property development projects. Substanঞal changes in cost esঞmates, parঞcularly in complex projects have had, and can in future periods have, a significant effect on the Group’s profitability. In making the judgement, the Group evaluates based on past experience, external economic factors and by relying on the work of specialists. Details of the property development costs are disclosed in Note 16(b). (b) Impairment of property, plant and equipment The Group recognises impairment loss in respect of property, plant and equipment when the carrying amount of the individual assets exceeds its recoverable amount, which is the higher of the fair value less costs of disposal or value-in-use. For the financial year ended 31 March 2025, the carrying amounts of property, plant and equipment of RM118,098,000 (which consists of land of RM3,986,000, school buildings of RM109,338,000, and equipment of RM4,774,000) relaঞng to the educaঞon segment were subject to impairment test, as a result of recurring losses. Accordingly, the Group has performed a value-in-use assessment and fair value assessment by engaging with an external valuaঞon specialist in order to establish the recoverable amount. (i) Value-in-use In this financial year, the Group has not recognised any impairment loss for the land, school buildings, and equipment (“school CGU”) based on the esঞmaঞon of the value-in-use as disclosed in Note 12. Esঞmaঞng the value-in-use requires the Group to make an esঞmate of the expected future cash flows, which include the student growth rate and course fee, from the conঞnuing use of the asset, and discounted at an appropriate rate to reflect the current market assessments of the ঞme value of money and the risks specific to the asset for which the cash flow esঞmates have not been adjusted. The pre-tax discount rates applied to the cash flow projecঞons is 11.90%. The projected student growth rate is determined based on management’s assessment of the market. At the reporঞng date, if the projected student growth rate used in the value-in-use of school CGU had been 3% lower, with all variables held constant, there would not result in any shorall. At the reporঞng date, if the projected rate of increase in course fee used in the value-in-use of school CGU had been 3% lower, with all variables held constant, there would be a shorall of RM332,000. At the reporঞng date, an increase of 0.5% in the discount rate used would not result in any shorall. notes to the financial statements 31 march 2025 (cont’d.) 175 MATRIX CONCEPTS HOLDINGS BERHAD INTEGRATED ANNUAL REPORT 2025 07 FINANCIAL STATEMENTS
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