Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HKAS 36.134(c) & (d)
HK Listco Ltd
Financial statements for the year ended 31 December 2023
Electronics Hong Kong 181,182
The recoverable amount of the CGU is determined based on value-in-use calculations. The group
engaged an independent professional valuer to assist with the calculation. These calculations use cash
flow projections based on financial budgets approved by management covering a five-year period. The
key assumptions used in estimating the recoverable amount are as follows:
2023
2022
Annual revenue growth rate during the forecast period (note (i)):
[•]%
[•]%
Gross profit margin
[•]%
[•]%
Growth rate beyond the forecast period (note (ii))
[•]%
[•]%
Pre-tax discount rate
[•]%
[•]%
(i)
The significant decrease in revenue growth rate is due to the termination of relationship with
one of the group's major customers in the fourth quarter of 2023.
(ii)
Cash flows beyond the five-year period are extrapolated using an estimated weighted average
growth rate which is consistent with the forecasts included in industry reports and generally in
line with 2022.
HKAS 36.126(a), 130(a) & The impairment loss of $184,000 recognised in "Other operating expenses" 158 during the year solely
(e) & 134(f)
relates to the group's electronics manufacturing activities based in Hong Kong. As the CGU has been
reduced to its recoverable amount of $1,716,501,000157, any adverse change in the assumptions used
in the calculation of recoverable amount would result in further impairment losses.
[Paragraphs 126 to 132 of HKAS 36 contain detailed disclosure requirements that apply whenever an
entity recognises an impairment loss for goodwill. In addition, paragraphs 134 to 135 of HKAS 36
contain specific disclosure requirements which apply to estimates used to measure recoverable
amounts of CGUs containing goodwill or intangible assets with indefinite useful lives. Care should be
taken to comply with these requirements, including a description of management's approach to
determining the values assigned to the key assumptions and the information about the sensitivity of
recoverable amount to changes in those key assumptions.]
A16(32), CP
HKAS 36.134
181 In addition to the discussion in footnote 179, paragraph 32 of Appendix 16 to the MBLRS requires a listed issuer to include in its
annual report a discussion and analysis of, among others, material factors underlying its financial results and position and
significant events during the year. Where a listed issuer recorded a material impairment on its assets, it should discuss the
circumstances that led to impairment. Where the impairment is supported by a valuation, the SEHK recommends dis closure of
information about the basis of the valuation, including:
(a) details of the value of inputs used for the valuation together with the bases and assumptions;
(b)
reasons for any significant changes in the value of the inputs and assumptions from those previously adopted;
(c) the valuation method and reasons for using that method; and
(d) an explanation of any subsequent changes to the valuation method adopted.
For additional illustrative IFRS disclosures on impairment, please refer to section 2.2 of the Guide to annual financial statement -
COVID-19 supplement (September 2020) ("the COVID-19 supplement") produced by KPMG International Standards Group.
182 Paragraph 134 of HKAS 36 sets out disclosure requirements which are applicable to each CGU for which the carrying amount of
goodwill or intangible assets with indefinite useful lives allocated to that unit is significant in comparison with an entity's total
carrying amount of goodwill or intangible assets with indefinite useful lives. The specific disclosures depend on whether the
recoverable amount of the CGU is based on value in use or fair value less costs of disposal:
•
•
If the recoverable amount is based on value in use (as is the case for HK Listco), entities need to provide the disclosures
regarding cash flow projections used to calculate value in use under paragraph 134(d) of HKAS 36.
If the recoverable amount is based on fair value less costs of disposal, then entities need to disclose information about the
valuation technique used to measure fair value less costs of disposal under paragraph 134(e) of HKAS 36. If fair value less
costs of disposal is not measured using a quoted price for an identical unit, as would generally be the case, entities need to
provide the extra information required by paragraphs 134(e)(i)-(iiB) of HKAS 36.
117
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