Annual Report 2023

239 2023 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 16 Goodwill 2023 2022 $’000 $’000 Cost and carrying amount: At 1 January and 31 December 84,051 84,051 Impairment tests for cash-generating units containing goodwill and intangible assets with indefinite useful lives Goodwill and intangible assets with indefinite useful lives belong to the Group’s non-franchised transport operations as a cash- generating unit. The recoverable amount of the cash-generating unit is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a period of one year. Cash flows beyond the one-year period are extrapolated using the estimated rates stated below. Key assumptions used for value-in-use calculations are as follows: 2023 2022 % % Growth rate 1.5 1.5 Discount rate 7.1 – 8.3 7.1 – 8.3 The growth rate used does not exceed the long-term average growth rate for the business in which the cash-generating unit operates. The discount rate used is pre-tax and reflects specific risks relating to the segment. The recoverable amount of the cash-generating unit based on the value-in-use calculations is higher than its carrying amount. Accordingly, no impairment loss on goodwill or intangible assets with indefinite useful lives has been recognised in profit or loss.