ESR AR 2019 EN

Notes to the Consolidated Financial Statements 31 December 2019 190 Focused 20. GOODWILL (continued) Impairment testing of goodwill (continued) With regard to the assessment of the values in use of the cash-generating units, management believes that no reasonable possible change in any of the above key assumptions would cause the carrying values including goodwill, of the cash-generating units to materially exceed the recoverable amounts. The carrying amounts of goodwill allocated to each cash-generating units of business are as follows: Asset management business As at 31 December As at 31 December 2019 2018 USD’000 USD’000 Redwood 210,480 210,480 CIP N/A 40,532 VITM N/A 18,618 Infinitysub 34,370 15,752 ESR Australia 81,823 N/A SIP 13,570 N/A Total 340,243 285,382 Assumptions were used in the value in use calculation of the Group’s cash-generating unit for 31 December 2019 and 2018. The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill. Budgeted gross fee income — The basis used to determine the value assigned to the budgeted gross fee income is the average fee income achieved in the year immediately before the budget year, increased for expected market development. Discount rates — The discount rates used are before tax and reflect specific risks relating to the relevant units.