138 | CapitaLand Limited Annual Report 2014
Appendix
4
INTANGIBLE ASSETS
(cont’d)
Goodwill
$’000
Others
^
$’000
Total
$’000
The Company
Cost and carrying amount
At 1 January 2013, 31 December 2013 and 31 December 2014
–
147
147
^
Others comprise club memberships.
Impairment test for Goodwill
For the purpose of goodwill impairment testing, the carrying amounts of goodwill allocated to the cash-generating
units (CGU) as at 31 December were as follows
Capitalisation
Rates
Terminal Growth
Rates
Discount
Rates
Carrying
Value
2014
%
2013
%
2014
%
2013
%
2014
%
2013
%
2014
$’000
2013
$’000
Restated
The Ascott Limited (Ascott)
–
–
2.1
1.5
7.0
6.5 416,706 416,706
A serviced residence
in London
–
–
2.5
2.5
7.8
7.8
17,389
17,455
Self-storage business
in Singapore
7.3 to 8.1
–
–
9.9
–
9.9
13,715
13,214
At 31 December
447,810 447,375
Ascott and a serviced residence in London
The recoverable amounts of the CGUs are determined based on value in use calculations. The value in use
calculation is a discounted cash now model using cash now projections based on the most recent forecasts
approved by management covering three to mve years. Cash nows beyond these periods are extrapolated using
the estimated terminal growth rates stated in the table above. The discount rates applied are the weighted average
cost of capital from the relevant business segment. The key assumptions are those relating to expected changes
in average rental rates and occupancy and direct costs. The terminal growth rates used for each CGU are within
management’s expectation of the long term average growth rates of the respective industry and countries in which
the CGUs operate.
Self-storage business in Singapore
The recoverable amount of the CGU is based on fair value less costs of disposal, estimated using the capitalisation
approach. The fair value measurement was categorised as Level 3 on the fair value hierarchy. The capitalisation
approach capitalises the income stream into a present value using a single-year capitalisation rate. The capitalisation
rate was based on the nature, location, tenure, tenancy promle of the property together with the prevailing property
market conditions. References were made to yields derived from industrial property transactions and capitalisation
rates adopted by industrial real estate investment trusts (REITs) in their recent portfolio valuation.
The Group believes that any reasonably possible changes in the above key assumptions applied are not likely to
materially cause the recoverable amount to be lower than its carrying amount.
Notes to the Financial Statements
Year ended 31 December 2014
