Annual Report 2020

150 Notes to the Financial Statements Annual Report 2020 Miramar Hotel and Investment Company, Limited 10 Investment properties, other property, plant and equipment (Continued) (e) Right-of-use assets (continued) The Group leased a number of operating outlets which contain variable lease payment terms that are based on sales generated from the operating outlets and minimum annual lease payment terms that are fixed. These payment terms are common in operating outlets in Hong Kong where the Group operates. During the year, the Group received rent concessions in the form of a discount on fixed payments during the period of severe social distancing and travel restriction measures introduced to contain the spread of COVID-19. The amounts of fixed and variable lease payments and COVID-19 rent concessions for the year are summarised below: Year ended 31 December 2020 Fixed payments Variable payments COVID-19 rent concessions HK$’000 HK$’000 HK$’000 Operating outlets 4,001 132 (14,274) Year ended 31 December 2019 Fixed payments Variable payments COVID-19 rent concessions HK$’000 HK$’000 HK$’000 Operating outlets 14,755 118 – As disclosed in note 1(c), the Group has early adopted the Amendment of HKFRS 16, Covid-19- Related Rent Concessions , and has applied the practical expedient introduced by the Amendment to all eligible rent concessions received by the Group during the year. (f) Impairment loss on other property, plant and equipment Indicators of impairment are identified in certain hotel, food and beverage outlets and travel branches for which each hotel/outlet/travel segment is identified as a single cash-generating unit (“CGU”). During the year, in view of the loss sustained by certain hotel, food and beverage outlets and travel segment due to COVID-19, management considered indicators of impairment of other property, plant and equipment associated with these CGUs existed at 31 December 2020 and performed an impairment assessment thereon. Based on the impairment assessment conducted by management, impairment losses of HK$34,237,000 were recognised in profit or loss during the year ended 31 December 2020. The aggregate recoverable amounts of certain food and beverage outlets and a hotel amounted to HK$18,500,000 and $43,400,000 respectively. Apart from the above, the recoverable amounts of the remaining impaired other property, plant and equipment of the remaining food and beverage outlet and the travel segment were minimal. The recoverable amount is determined based on the higher of value-in-use and the fair value less costs of disposal. The estimate of recoverable amounts were based on value-in-use calculations by adopting discounted cash flow forecast of each CGU with pre-tax discounted rate of 5.5% per annum.