ifrs-full:DisclosureOfGoodwillExplanatory
The movements of goodwill during the years are as follows:
| |
|
2017
|
|
|
2016
|
|
|
Beginning of the year
|
|
|
|
|
|
|
|
Cost
|
|
|
15,391,642
|
|
|
|
14,919,930
|
|
|
Accumulated impairment losses
|
|
|
(3,255,913
|
)
|
|
|
(3,242,748
|
)
|
|
Net book value
|
|
|
12,135,729
|
|
|
|
11,677,182
|
|
|
Movement:
|
|
|
|
|
|
|
|
|
|
Business combination (Note 40)
|
|
|
3,167,566
|
|
|
|
-
|
|
|
Disposal of subsidiary-cost
|
|
|
(309,269
|
)
|
|
|
-
|
|
|
Disposal of subsidiary-impairment
|
|
|
309,269
|
|
|
|
-
|
|
|
Currency translation differences-cost
|
|
|
186,015
|
|
|
|
471,712
|
|
|
Currency translation differences-impairment
|
|
|
(5,190
|
)
|
|
|
(13,165
|
)
|
|
End of the year
|
|
|
15,484,120
|
|
|
|
12,135,729
|
|
|
Cost
|
|
|
18,435,954
|
|
|
|
15,391,642
|
|
|
Accumulated impairment losses
|
|
|
(2,951,834
|
)
|
|
|
(3,255,913
|
)
|
|
Net book value
|
|
|
15,484,120
|
|
|
|
12,135,729
|
|
Impairment tests for goodwill
Goodwill is allocated to the CGUs of the Company and its subsidiaries.
The carrying amounts of major goodwill allocated to individual CGUs are as follows:
|
|
2017
|
|
|
2016
|
|
|
PRC Power segment:
|
|
|
|
|
|
|
|
Shandong Power
|
|
|
2,739,818
|
|
|
|
-
|
|
|
Wuhan Power
|
|
|
518,484
|
|
|
|
518,484
|
|
|
Hainan Power
|
|
|
506,336
|
|
|
|
506,336
|
|
|
Heilongjiang Power
|
|
|
265,319
|
|
|
|
-
|
|
|
Yangliuqing Cogeneration
|
|
|
151,459
|
|
|
|
151,459
|
|
|
Qinbei Power
|
|
|
109,913
|
|
|
|
109,913
|
|
|
Jilin Power
|
|
|
109,826
|
|
|
|
-
|
|
|
Yueyang Power Company
|
|
|
100,907
|
|
|
|
100,907
|
|
|
Beijing Cogeneration
|
|
|
95,088
|
|
|
|
95,088
|
|
| |
|
|
|
|
|
|
|
|
|
Singapore segment:
|
|
|
|
|
|
|
|
|
|
Tuas Power
|
|
|
10,561,956
|
|
|
|
10,381,131
|
|
The recoverable amount of a CGU is determined based on value-in-use calculations. For domestic CGUs, these calculations use cash flow projections based on management's financial budgets covering periods of no more than five years. The Company expects cash flows beyond such periods will be similar to that of the respective final forecast years on existing production capacity.
For the goodwill allocated to Tuas Power, management has based their assessment of recoverable amount on value-in-use calculations. Management prepared the impairment model based on budget approved and various factors, such as inflation, power demand and other factors as well as the terminal value. On average, the growth rates of 3.0% was used in consideration of future expansion plans and new development projects as part of the long-term strategy. Cash flows beyond the terminal year was extrapolated using a growth rate of 2.0%.
Discount rates used for value-in-use calculations:
|
PRC Power segment
|
|
|
8.51%-13.59
|
%
|
|
Singapore segment
|
|
|
7.30
|
%
|
Key assumptions used for value-in-use calculations:
Key assumptions applied in the impairment tests include the expected tariff rates, demands of electricity in specific regions where these power plants are located and fuel cost. Management determined these key assumptions based on past performance and its expectations on market development. The discount rates used reflect specific risks relating to individual CGUs. Management believes that any reasonably possible change in any of these key assumptions on which recoverable amounts of individual CGUs are based may cause carrying amounts of individual CGUs to exceed their recoverable amounts. Please refer to Note 4 and 12 for details of respective sensitivity analysis on domestic and oversea CGU impairment testing.
In 2017 and 2016, the increase of goodwill in respect of Tuas Power was due to currency translation differences.