WASCO BERHAD 208 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 6 GOODWILL AND OTHER INTANGIBLE ASSETS (CONTINUED) Recognition and measurement (continued) b) Trademarks, technical know-how & intellectual property Separately acquired trademarks are shown at historical cost. Trademarks acquired in a business combination are recognised at fair value at the acquisition date. Trademarks have an infinite useful life and are carried at cost less accumulated impairment. Separately acquired technical know-how is shown at historical costs. Technical know-how acquired in a business combination is recognised at fair value at the acquisition date. Technical know-how has a finite useful life and is carried at cost less accumulated amortisation. Amortisation is calculated using the straight line method to allocate the cost of technical know-how over its estimated useful lives of 5 years. Expenditure on acquired intellectual property is capitalised and amortised using the straight line method over their estimated useful life, not exceeding a period of 20 years. Goodwill is allocated to the Group’s cash-generating units (“CGU”) identified according to operating divisions. The carrying amounts of goodwill allocated to the respective CGUs are as follows: Group 2024 RM’000 2023 RM’000 Cash-generating units Specialised Pipe Coating and Corrosion Protection Services (CGU A) 82,846 84,612 EPC, Fabrication and Rental of Gas Compressors and Process Equipment (CGU B) 71,466 73,168 154,312 157,780 Significant estimates: Key assumptions used for value in use calculations The key assumptions used in the cash flow projections for CGU A under the best, base and worst case scenarios and CGU B under the base and worst case scenarios are as follows: CGU A (a) The revenue forecast for CGU A is supported by management’s forecasted projects, which is in line with past performance records, future market outlook and management’s expectation of market developments; (b) Pre-tax discount rate of 18.3% (2023: 19.2%) was applied for all three scenarios, benchmarked against comparable companies at the date of assessment; and (c) A terminal growth rate of nil (2023: 1.5%) was applied to the best and base case scenario (2023: base case scenario) while no terminal growth was applied to the worst case scenario.
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