158 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2023 (CONT’D) DATASONIC GROUP BERHAD FINANCIAL STATEMENT 06 11. DEVELOPMENT EXPENDITURE (CONT’D) The development expenditure consist of direct and related costs for overhead and software solutions incurred in the process of development, and attributable to the Group’s customised smart card solutions (“CSCS”) reportable segment. Their amortisation charges are recognised in profit or loss as Cost of Sales line item. The Group has assessed the recoverable amounts of the development expenditure and determined that no impairment is required. Their recoverable amounts are determined using the value in use approach, and this is derived from the present value of the future cash flows from the customised software and hardware systems business computed based on the projections of financial budgets covering a period of 5 years (2022 - 5 years). The key assumptions used in the determination of the recoverable amounts are as follows:- (i) Budgeted gross margin Gross margin is the forecasted margin as a percentage of revenue over the five-year (2022 - five-year) projection periods which were determined based on the expectations of market development and, adjusted for market and economic conditions, internal resource efficiency, where applicable. (ii) Growth rate Based on the expected projection of the customised software and hardware systems business. (iii) Discount rate (pre-tax) Reflects specific risks relating to the relevant cash-generating unit. 12. TRADE RECEIVABLES Group 2023 2022 RM’000 RM’000 Trade receivables 111,069 33,481 Allowance for impairment losses (10,873) (7,562) 100,196 25,919 Accrued income 14,409 24,846 114,605 50,765 The trade receivables are made up of:- (a) Non-current: Trade receivables - 1,436 Accrued income - 710 - 2,146 (b) Current: Trade receivables 100,196 24,483 Accrued income 14,409 24,136 114,605 48,619 114,605 50,765
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