19. IMPAIRMENT OF ASSETS (CONTINUED)
Recoverable amount based on value-in-use
The recoverable amount of the CGU is determined based on value-in-use calculations. These calculations use pre-tax cash
flow projections based on financial budgets approved by the directors covering a five-year period. Cash flows beyond the five-
year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term
average growth rate for the relevant CGUs.
The key assumptions used in value-in-use calculations are as follows:
2014
2013
%
%
Gross margin
1
30
30
Discount rate
2
12
12
Terminal growth rate
3
5
5
Assumptions:
1 Budgeted gross margin.
2 Pre-tax discount rate applied to the cash flow projections.
3 Weighted average growth rate used to extrapolate cash flows beyond the budget period.
The directors have determined budgeted gross margin based on past performance and expectations of market development.
The discount rates used are based on published healthcare industry market data and inflation rate.
20. DEFERRED TAX
Deferred tax assets and liabilities were offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after
appropriate offsetting, are shown on the statements of financial position:
Group
2014
2013
RM’0
RM’000
RM’000
(Restated)
Deferred tax assets
27,841
25,678
Deferred tax liabilities
(42,673)
(47,701)
At 31 December
(14,832)
(22,023)
261
Notes to the
Financial Statements
For the financial year ended 31 December 2014 (continued)
KPJ Healthcare Berhad annual report
2014
