notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
13 GOODWILL (CONTINUED)
Value-in-use was determined by discounting the future cash flows generated from the CGUs based on the following key assumptions which were predicted that there
will be no material changes in the Group’s principal activities.
2014
2013
Growth rate
Pre-tax
discount rate
Growth rate
Pre-tax
discount rate
CGU A
3.8%
14.9%
1.3%
12.5%
CGU B
6.3%
15.2%
15.0%
14.0%
CGU C
4.1%
19.7%
4.5%
18.8%
Other key assumptions used in calculating the value-in-use are described below, assuming there are no material changes in the principal activities of the Group.
(i)
Growth rate
The revenue growth rate used for the cash flows in respect of year 2 to 5 is 3.8% to 6.3% (2013: 1.3% to 15.0%). Cash flows beyond this 5-year period used a
zero growth rate. This is below the long term average growth rate for the industries in which the respective CGUs operates.
(ii)
Discount rate
The discount rates used reflect the weighted average cost of capital of the Group with a premium representing the business risk of the respective CGUs.
118
Wah Seong Corporation Berhad • Annual Report 2014
