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Annual Report 2015
65
Notes to the Financial Statements Statement of Financial Position
8. Property, plant and equipment (continued)
(e) No impairment loss was recognised for the year ended 31st December 2015 (2014: HK$599 million). For the year
ended 31st December 2014, impairment in value of aircraft and related equipment was considered by writing down
the carrying value to the estimated recoverable amount of HK$2,623 million which was the higher of the value in use
and the fair value less costs of disposal. The recoverable amount was determined based on the fair value less costs
of disposal, using a market comparison approach by reference to the estimated sales value at 31st December 2014.
During the year, a number of aircraft have been transferred to assets held for sale. The fair value on which the
recoverable amount is based is categorised as a Level 2 measurement.
9. Intangible assets
Goodwill
HK$M
Computer
software
HK$M
Others
HK$M
Total
HK$M
Cost
At 1st January 2015 7,666 3,738 253 11,657
Additions – 760 – 760
At 31st December 2015 7,666 4,498 253 12,417
At 1st January 2014 7,666 2,938 214 10,818
Additions – 800 39 839
At 31st December 2014 7,666 3,738 253 11,657
Accumulated amortisation
At 1st January 2015 – 1,338 1 1,339
Charge for the year – 468 4 472
At 31st December 2015 – 1,806 5 1,811
At 1st January 2014 – 1,016 – 1,016
Charge for the year – 322 1 323
At 31st December 2014 – 1,338 1 1,339
Net book value
At 31st December 2015 7,666 2,692 248 10,606
At 31st December 2014 7,666 2,400 252 10,318
The carrying amount of goodwill allocated to the airline operations is HK$7,627 million (2014: HK$7,627 million). In
accordance with HKAS 36 “Impairment of Assets” the Group completed its annual impairment test for goodwill allocated
to the Group’s various cash generating units (“CGUs”) by comparing their total recoverable amounts to their total
carrying amounts as at the reporting date. The recoverable amount of a CGU is determined based on value-in-use
calculations. These calculations use cash flow projections based on five-year financial budgets, with reference to past
performance and expectations for market development, approved by management. Cash flows beyond the five-year
period are extrapolated with an estimated general annual growth rate of 1.0% to 3.0% (2014: 1.0% to 3.0%) which does
not exceed the long-term average growth rate for the business in which the CGU operates. The discount rates used of
approximately 8.0% (2014: 8.5%) are pre-tax and reflect the specific risks related to the relevant segments. Management
believes that any reasonably foreseeable change in any of the above key assumptions would not cause the carrying
amount of goodwill to exceed the recoverable amount.