173 ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2023 7. INTANGIBLE ASSETS (CONT’D) Impairment testing of goodwill Goodwill acquired through business combinations have been allocated to the Group’s cash-generating units (CGU) identified according to each individual business unit for impairment testing. The carrying amounts of goodwill less accumulated impairment losses are allocated as follows:- Group 2023 2022 $’000 $’000 CSE W-Industries, Inc. - Gulf Coast Power & Control of Louisiana, LLC 1,558 1,597 - Volta, LLC 17,606 18,044 - W-Industries of Texas, LLC 7,725 7,917 CSE-Global (Australia) Pty Ltd - Uniserve Group 4,983 5,030 - CSE New Zealand Ltd 1,068 1,085 - Telecommunications business 15,313* 8,761 - RCS Telecommunications –* 4,963 CSE-Global (Asia) Pte Ltd - CSE-EIS (Malaysia) Sdn Bhd 486 486 CSE Crosscom UK group - Chatterbox Ltd 2,465 2,367 - Zycomm Electronics Ltd 32 30 - Radiotek Ltd 1,196 1,149 - DTS.Solutions (U.K.) Ltd 474 456 CSE Technologies Pte Ltd - Logic Wireless 13,306 12,898 CSE Crosscom USA Inc - Radio One 10,496 – Grid Communications Pte Ltd 397 – 77,105 64,783 * During the year, the entire business of RCS Telecommunications have been integrated into business of Telecommunications business. As a result, Telecommunications business and RCS Telecommunications were assessed together as a single CGU for goodwill impairment testing. The recoverable amounts of the CGUs are determined based on value-in-use (“VIU”) calculations. The VIU calculations use 5-year cash flow projections based on financial forecasts with terminal value approved by management. Management has considered and determined the factors applied in these financial forecasts which include forecasted gross margins and average growth rates. The forecasted gross margins are based on past performance and its expectation of market development. Average growth rates of 0.5% to 10% (2022: 0.5% to 10%) used are consistent with forecasts based on existing contracts and book orders. The discount rate applied are assumed at 9.1% (2022: 7.8%) for VIU calculations, which the Group has assessed as its weighted average cost of capital.
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