26 Intangibles

 

	Goodwill
	AED’000
2020
At 1 January	6,705
Amortization charges during the year	–
	————————-
At 31 December	6,705
	=============
2019
Carrying value:
At 1 January	6,705
Amortization charges during the year	–
	————————-
At 31 December	6,705
	=============

 

Goodwill

Goodwill acquired through business combinations relates to Finance House L.L.C. (formerly known as Islamic Finance House P.J.S.C.)

Impairment test of goodwill

The Group performs impairment testing of the goodwill annually on 31 December.

Goodwill has been allocated to the subsidiary as a cash-generating unit.  This represents the lowest level within the Group at which the goodwill is monitored for internal management purposes.

During the year, the Group has performed a goodwill impairment review based on a forecast of the subsidiary’s cash flows.  The recoverable amount of the cash-generating unit was estimated on the basis of its value in use, which is determined by discounting future cash flows from the continuing operation of the cash generating unit. The discount rate applied to the cash flow projections is 11% and the growth rate used to extrapolate the cash flows beyond the five-year period is 3%. Based on the results of the goodwill impairment assessment the Group has concluded that the recoverable amount of the cash-generating unit is higher than its carrying value.