ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C3 Intangible assets Group Goodwill Dealer network Development expenditure $’000 $’000 $’000 Cost At 1 January 2020 856,897 170,693 547,192 Additions – – 83,704 Deconsolidation/disposal of subsidiaries – – – Write-off – – (2,413) Reclassification – – (15,902) Translation difference (14,395) 10,996 18,429 At 31 December 2020 842,502 181,689 631,010 Accumulated amortisation and impairment losses At 1 January 2020 42,886 43,390 137,617 Amortisation for the year* – 7,617 30,125 Impairment losses + 14,431 556 11,021 Deconsolidation/disposal of subsidiaries – – – Write-off – – (2,413) Reclassification – – (14,529) Translation difference (1,194) 1,772 (2,123) At 31 December 2020 56,123 53,335 159,698 Net book value At 31 December 2020 786,379 128,354 471,312 Cost At 1 January 2019 561,003 175,890 424,526 Additions – – 93,425 Acquisition of subsidiaries 311,018 – 40,585 Deconsolidation/disposal of subsidiaries (493) – – Write-off – – – Translation difference (14,631) (5,197) (11,344) At 31 December 2019 856,897 170,693 547,192 Accumulated amortisation and impairment losses At 1 January 2019 43,663 36,573 83,780 Amortisation for the year* – 7,621 43,079 Impairment losses + – – 11,876 Deconsolidation/disposal of subsidiaries (161) – – Write-off – – – Translation difference (616) (804) (1,118) At 31 December 2019 42,886 43,390 137,617 Net book value At 31 December 2019 814,011 127,303 409,575 * Amortisation charge of $81,011,000 (2019: $92,620,000) is recognised in the income statement as part of: – Other operating expenses of $45,155,000 (2019: $31,528,000); and – Cost of sales of $35,856,000 (2019: $61,092,000) + During the year, the Group assessed that certain development expenditure, licenses and commercial and intellectual property rights associated with servicing of certain type of commercial airplane were impaired as these intangible assets were not expected to be generating future economic benefits and impairment losses of $29,374,000 were recognised in cost of sales and $1,961,000 were recognised in other operating expenses in the income statement. In the prior year, impairment losses of $23,227,000 were recognised in other operating expenses in the income statement on certain licenses and commercial and intellectual property rights assessed by the Group to be impaired as these intangible assets were not expected to be generating future economic benefits. During the year, an impairment loss on goodwill of $14,431,000 was recognised in other operating expenses in the income statement as the recoverable amount of two CGUs were determined to be lower than the carrying amount. The recoverable amount was determined based on the value-in-use method. / ST ENG I NEER I NG 186