63
Straco Corporation Limited • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
8
Intangible assets and goodwill
Goodwill on
consolidation
Brand,
trademarks and
others
Development
costs
Total
Group
$
$
$
$
Cost
At 1 January 2013 and 31 December 2013
1,419,013
–
476,732
1,895,745
Acquisition through business combination
–
3,262,101
–
3,262,101
At 31 December 2014
1,419,013
3,262,101
476,732
5,157,846
Accumulated amortisation
At 1 January 2013 and 31 December 2013
–
–
476,732
476,732
Amortisation
–
68,581
–
68,581
At 31 December 2014
–
68,581
476,732
545,313
Carrying amounts
At 1 January 2013 and 31 December 2013
1,419,013
–
–
1,419,013
At 31 December 2014
1,419,013
3,193,520
–
4,612,533
As part of the acquisition of the Singapore Flyer, the Group recognised brand, trademarks and other intangible assets amounting to $3,262,101,
determined on a provisional basis (see note 27).
Impairment testing for goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s CGU for a subsidiary in the PRC, Underwater World Xiamen Co Ltd, whose
principal activity is the operation of an underwater aquarium.
The recoverable amount of this CGU is based on its value in use and is determined by discounting the future cash flows to be generated from the
continuing use of the CGU. Value in use in 2014 is determined in a similar manner as in 2013 and is based on the following key assumptions:
Cash flows were projected based on past operating performances and a five-year business plan;
The anticipated annual revenue growth included in the cash flow projections is 8% for the years 2015 to 2019;
A pre-tax discount rate of 6.55% was applied in determining the recoverable amount of the unit. The discount rate used reflects the risk-free
rate and the premium for specific risks relating to the business unit; and
A terminal value is considered.
