Notes to the Financial Statements For the financial year ended 31 December 2024 4 INTANGIBLE ASSETS (continued) (a) Impairment test for goodwill The key assumptions used in the estimation of the recoverable amount are set below: Key assumptions Terminal growth rates Discount rates Carrying value 2024 2023 2024 2023 2024 2023 % % % % $’M $’M The Ascott Limited (Ascott) 2.5 1.1 8.0 6.9 417 417 Synergy Global Housing 2.5 2.4 10.5 11.0 4 5 TAUZIA Hotel Management (TAUZIA) 3.2 3.1 11.0 11.5 9 10 QSA Group Pty Ltd (QSA Group) 2.0 1.7 8.0 9.5 47 48 Oakwood Worldwide (Asia) Pte. Ltd. (Oakwood) 2.5 2.4 11.0 10.0 49 49 Quest Apartment Hotels (NZ) Limited (Quest NZ) 2.1 2.0 9.0 11.5 15 15 Ascendas-Singbridge (ASB) 1.0 1.0 6.8 6.9 49 49 As at 31 December 590 593 Ascott, Synergy Global Housing, TAUZIA, QSA Group, Oakwood and Quest NZ The recoverable amounts of the CGUs are determined based on value in use calculations. The value in use calculation is a discounted cash flow model using cash flow projections based on the most recent forecasts approved by management covering three to ten years. The discounted cash flow models also took into account the probability of changes to cashflow projection. Cash flows beyond these periods are extrapolated using the estimated terminal growth rates stated in the table above. The discount rates applied are the weighted average cost of capital from the relevant business segments. The key assumptions are those relating to expected changes in average rental, occupancy rates, direct costs and market volatility affecting weighted average cost of capital. The terminal growth rates used for each CGU are based on management’s expectation of the long-term average growth rates of the respective industries and countries in which the CGUs operate. Management has assessed that the recoverable amount to be higher than its carrying amount. ASB The recoverable amount of the CGU is determined based on value in use calculations. The value in use calculation is a discounted cash flow model using cash flow projections based on the most recent forecasts approved by management covering ten years. Cash flows beyond the first year are extrapolated using the estimated terminal growth rate of 1.0% (2023: 1.0%). The discount rate of 6.8% (2023: 6.9%) is applied using the weighted average cost of capital from the relevant business segment. Management has assessed that the recoverable amount to be higher than its carrying amount. 120 CapitaLand Investment Limited Notes to the Financial Statements For the financial year ended 31 December 2024 4 INTANGIBLE ASSETS (continued) (b) Impairment test for management contracts These mainly relate to the management contracts entered into between subsidiary companies and CapitaLand Ascendas REIT and CapitaLand India Trust. These contracts are deemed to have indefinite useful lives and are measured at cost less accumulated impairment losses. The recoverable amount of the CGU is determined based on value in use calculations. Cash flow projections are based on forecast using discount rates of 7.1% to 10.5% (2023: 6.0% to 8.0%) and growth rates of 1.0% (2023: 1.0%) covering a ten-year period and beyond. The forecast is reviewed, updated and approved by management on an annual basis. The Group has assessed and determined that no impairment in the value of management contracts has arisen. 5 INVESTMENT PROPERTIES The Group Note 2024 2023 $’M $’M At 1 January 13,572 14,706 Acquisition of subsidiaries 29(b) 264 – Disposal of subsidiaries 29(d) (7,382) (181) Additions 166 506 Disposals (1,453) (110) Reclassification to assets held for sale 13 – (731) Reclassification from development properties for sale – 36 Reclassification from/(to) property, plant and equipment 1 (69) Changes in fair value 25(d) (22) (257) Translation differences (151) (328) At 31 December 4,995 13,572 (a) Investment properties, which include those in the course of development, are stated at fair value based on independent professional valuations. The fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion. In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value of investment properties include marketcorroborated capitalisation rate, terminal yield rate, discount rate, comparable market price, occupancy rate and gross development costs. The carrying amounts of the investment properties at reporting dates were based on valuations performed by the independent external valuers. The valuers had considered valuation techniques including the direct comparison method, capitalisation approach, discounted cash flows and residual method in arriving at the open market value as at the reporting date. The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the investment properties. The capitalisation approach capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. The discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value. In the residual method of valuation, the total gross development costs and developer’s profit are deducted from the gross development value to arrive at the residual value of the land. The gross development value is the estimated value of the property assuming satisfactory completion of the development as at the date of valuation. Details of valuation methods and key assumptions used to estimate the fair values of investment properties are set out in note 31. 121 Annual Report 2024
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