FGV Audited Financial Statements 2020

23 INTANGIBLE ASSETS (CONTINUED) Company Software RM’000 Intangible asset under development RM’000 Total RM’000 Net book value 2020 At 1 January 2020 16,085 9,326 25,411 Additions 1,035 271 1,306 Amortisation charge (8,510) - (8,510) Reclassification 1,771 (1,771) - At 31 December 2020 10,381 7,826 18,207 2019 At 1 January 2020 20,626 11,438 32,064 Additions 410 1,809 2,219 Amortisation charge (8,872) - (8,872) Reclassification 3,921 (3,921) - At 31 December 2020 16,085 9,326 25,411 (a) Impairment test for goodwill Goodwill is allocated to the Group’s cash-generating units (CGU) as follows: Group 2020 RM’000 2019 RM’000 Sugar business operations in Malaysia 576,240 576,240 Palm upstream operations in Malaysia 226,795 226,795 Others 6,037 - 809,072 803,035 (i) Sugar business operations in Malaysia The goodwill of RM576,240,000 (2019: RM576,240,000) relates to the acquisition of the sugar business by the Group and is allocated to MSM Malaysia Holdings Berhad (“MSMH”). This represents the lowest level at which goodwill is monitored for internal management purposes. The recoverable amount of the CGU is determined based on VIU calculation using cash flows projections based on financial budgets approved by the Directors covering an eight-year period and applying a terminal value growth rate multiple using longer-term sustainable growth rates. An extended forecast period of eight years is used to show the full impact following the rationalisation plan in MSMH. The recoverable amount calculated based on VIU exceeded the carrying value by RM254 million (2019: RM144 million). 98 Notes to the Financial Statements For The Financial Year Ended 31 December 2020 FGV HOLDINGS BERHAD Audited Financial Statement 2020