Annual Report - QuamIR

Notes to the Consolidated Financial Statements (Continued)
19 Intangible assets (Continued)
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units identified
according to country of operation and business segment. For the
purpose of impairment testing, the recoverable amount of the
business unit is determined based on value-in-use calculations. The
key assumptions adopted for growth rates and discount rates used in
the value-in-use calculation is based on management best estimates.
In 2010, the calculation used pretax cash flow projections based on
financial budgets approved by management covering a 12-year period
cash flow and based on a discount rate of 5.75% to 10.04% taking into
account the risk level of the business unit. Growth rates with range from
3% to 10% were determined by considering both internal and external
factors.
20 Properties under development
19
5.75%10.04%
3%10%
20
Group
2011 2010
HK$ Million HK$ Million
Properties under development comprise:
Construction costs and capitalised expenditure 870.4 431.8
Amortisation of prepaid land lease payments 46.7 24.5
917.1 456.3
The properties under development are all located in the Mainland
China.
At 31 December 2011, properties under development with carrying
value of HK$490.0 million (2010: HK$211.8 million) was pledged as
securities for the Group’s borrowings (Note 36).
490,000,000
211,800,000
36
146 HKC (Holdings) Limited • Annual Report 2011