Annual Report 2024

233 2024 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 15 Intangible assets Passenger service licences and transport operating rights $’000 Cost: At 1 January 2023, 31 December 2023, 1 January 2024 and 31 December 2024 529,090 Accumulated amortisation: At 1 January 2023, 31 December 2023, 1 January 2024 and 31 December 2024 – Net book value: At 31 December 2024 529,090 At 31 December 2023 529,090 In respect of those passenger service licences and transport operating rights of the Group that are regarded as having indefinite useful lives, there is no foreseeable limit to the period over which these assets are expected to generate cash flows for the Group. Intangible assets that are regarded as having indefinite useful lives have been allocated to the cash-generating unit of non-franchised transport operations for the purpose of impairment testing. Details of impairment testing are set out in note 16 to the consolidated financial statements. 16 Goodwill 2024 2023 $’000 $’000 Cost and carrying amount: At 1 January and 31 December 84,051 84,051 Impairment tests for cash-generating units containing goodwill and intangible assets with indefinite useful lives Goodwill and intangible assets with indefinite useful lives belong to the Group’s non-franchised transport operations as a cash-generating unit. The recoverable amount of the cash-generating unit is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a period of one year. Cash flows beyond the one-year period are extrapolated using the estimated rates stated below. Key assumptions used for value-in-use calculations are as follows: 2024 2023 % % Growth rate 1.5 1.5 Discount rate 7.1 – 8.5 7.1 – 8.3 The growth rate used does not exceed the long-term average growth rate for the business in which the cash-generating unit operates. The discount rate used is pre-tax and reflects specific risks relating to this cash-generating unit. The recoverable amount of the cash-generating unit based on the value-in-use calculations is higher than its carrying amount. Accordingly, no impairment loss on goodwill and intangible assets with indefinite useful lives has been recognised in profit or loss.