FORWARD TOGETHER Notes to the Consolidated Financial Statements 31 December 2022 184 19. GOODWILL US$’000 At 1 January 2021 Cost 340,243 Accumulated impairment — Net carrying amount 340,243 Cost at 1 January 2021, net of accumulated impairment 340,243 Acquisition of subsidiaries 202,393 At 31 December 2021 542,636 At 31 December 2021 Cost 542,636 Accumulated impairment — Net carrying amount 542,636 Cost at 1 January 2022, net of accumulated impairment 542,636 Acquisition of subsidiaries (note 34) 2,912,862 At 31 December 2022 3,455,498 At 31 December 2022 Cost 3,455,498 Accumulated impairment — Net carrying amount 3,455,498 Impairment testing of goodwill As of 31 December 2022, the Group’s goodwill impairment testing is allocated to the Redwood asset management business cash-generating unit, Infinitysub asset management business cash-generating unit, ESR Australia asset management business cash-generating unit, SIP asset management business cash-generating unit and ARA asset management business cash-generating unit. Redwood asset management business cash-generating unit The recoverable amount of the Redwood assets management business cash-generating unit has been determined based on a value in use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The discount rate applied to the cash flow projections is 11.5%. The growth rate used to extrapolate the cash flows of the Redwood asset management business cash-generating unit beyond the five-year period is 3.0%. This growth rate is based on the average growth rate of the management fee in which the business operates. Senior management believes that this growth rate is justified. Infinitysub asset management business cash-generating unit The recoverable amount of the Infinitysub asset management business cash-generating unit has been determined based on a value-in-use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The discount rate applied to the cash flow projections is 10.0%. The growth rate used to extrapolate the cash flows of the Infinitysub business cash-generating unit beyond the fiveyear period is 2.5%. This growth rate is based on the average growth rate of the management fee in which the business operates. Senior management believes that this growth rate is justified.
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