Page 192 - Crisil Annual Report 2023

5. Goodwill
Carrying value at the beginning of the year
Goodwill on business combination (refer to note 44)
- On acquisition of Peter Lee Associates Pty. Limited
- On acquisition of Bridge To India Energy Private Limited
- On net working capital adjustment of Greenwich Associates LLC
Foreign currency exchange gain
Carrying value at the end of the year
Goodwill has been allocated in the following CGU's: Global Research and Risk Solutions
Global Benchmarking Analytics
Business Intelligence & Risk Solutions
Consulting (Energy)
Total
Integrity Insight Impact
(C lakh)
37,267
-
-
110
606
37,983
9,545 24,817 3,621 - 37,983
Particulars
As at December 31, 2023
As at December 31, 2022
37,983
1,694
464
-
1,939
42,080
11,597
26,399
3,621
463
42,080
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Cash Generating Units (CGU) or groups of CGU’s, which benefit from the synergies of the acquisition. The chief operating decision maker reviews the goodwill for any impairment at the CGU’s level.
The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use, both of which are calculated by the Group using a discounted cash flow analysis. These calculations use pre tax cash flow projections over a period of three years, based on financial budgets approved by the management. For calculation of the recoverable amount, the Group has used the following rates:
Growth rate 5.00% Discount rate 16.60%
The above discount rate is based on the weighted average cost of capital of the Company or Group. These estimates are likely to differ from future actual results of operations and cash flows.
An analysis of sensitivity of the computation to a change in key parameters (operating margins and discount rate) based on reasonably probable assumptions, did not identify any probable scenario in which recoverable amount of the CGU would decrease below its carrying amount.
As at December 31, 2023 and December 31, 2022, the estimated recoverable amount of the CGU exceeded its carrying amount, hence impairment is not triggered.
Particulars
As at December 31, 2023
As at December 31, 2022
5.00%
19.40%
190 Annual Report 2023