WASCO BERHAD 228 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 9 INVESTMENT IN ASSOCIATES Group Note 2024 RM’000 2023 RM’000 Quoted shares in Malaysia (a) 130,114 130,114 Unquoted shares 91,947 94,527 Share of post-acquisition results and reserves (43,649) (54,494) 178,412 170,147 Less: Accumulated impairment loss (b) (55,836) (57,405) 122,576 112,742 Share of net assets of associates 122,576 112,742 Quoted shares in Malaysia at fair value 114,246 82,223 Recognition and measurement Investment in associates is accounted for in the consolidated financial statements using the equity method of accounting. Equity accounting is discontinued when the carrying amount of the investment in an associate diminishes by virtue of losses to zero, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Impairment assessment The carrying amount of investments in associates are compared to their recoverable amount. The recoverable amount was determined using their value-in-use. The value-in-use is the net present value of the projected future cash flows to be derived from that asset. Projected future cash flows are calculated based on historical sector and industry trends, general market and economic conditions, changes in technology and other available information. Due to the uncertainty of the future economic condition, management developed the best case, base case and worst case scenario of cash flow projections. Probabilities of occurrence were assigned to each scenario to arrive at a single set of cash flow projection. The assumptions used in all three scenarios and the probabilities of occurrence assigned required management’s judgement. (a) Quoted shares – Petra Energy Berhad As at 31 December 2024 and 31 December 2023, the fair values of the Group’s investment in quoted shares were based on Level 1 of the fair value hierarchy. The market value of the Group’s interest in quoted shares, representing its fair value as at 31 December 2024, was approximately RM114,246,000 (2023: RM82,223,000). This fair value is approximately RM8,082,000 (2023: RM30,331,000) below the carrying value, giving rise to an impairment indicator on the carrying value of the investment of RM122,328,000 (2023: RM112,554,000).
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