FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 113 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 22 INTANGIBLE ASSETS (CONTINUED) Company Software RM’000 Intangible asset under development RM’000 Total RM’000 Net book value 2023 At 1 January 2023 4,890 4,957 9,847 Additions 487 6,257 6,744 Amortisation charge (2,883) - (2,883) Reclassification 811 (811) - At 31 December 2023 3,305 10,403 13,708 2022 At 1 January 2022 6,625 4,802 11,427 Additions - 3,202 3,202 Amortisation charge (4,782) - (4,782) Reclassification 3,047 (3,047) - At 31 December 2022 4,890 4,957 9,847 (a) Impairment test for goodwill Goodwill is allocated to the Group’s cash-generating units (CGU) as follows: Group 2023 RM’000 2022 RM’000 Sugar business operations in Malaysia 576,240 576,240 Palm upstream operations in Malaysia 226,795 226,795 Others - 6,037 803,035 809,072 (i) Sugar business operations in Malaysia The goodwill of RM576,240,000 (2022: 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 Cash Generating Unit (“CGU”) is determined based on probability weighted scenario assessment of value-in-use (“VIU”) calculations using cash flows projections which is approved by the Board of Directors. The key assumptions of the projection are based on 2024 to 2028 cash flow forecasts approved by the Directors and applying a terminal value multiple using a long term sustainable growth rate.
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