Annual Report 2020

Key Audit Matters ( cont'd.) Impairment assessment of non-financial assets ( cont'd.) b) Impairment assessment of intangible assets Our response (cont'd.) Refer to Note 3.5 and Note 16 to the financial statements. The Group is required to perform annual impairment test of cash generating units (CGUs) to which intangible assets have been allocated. The Group estimated the recoverable amount of its CGUs based on the value-in-use ("VIU") model. Estimating the VIU of CGUs involves estimating the future cash inflows and outflows that will be derived from the CGUs, and discounting them at an appropriate rate. Included in the Group’s intangible assets as at 31 December 2020 are: (a) g oodwill amounted to RM103 million arising from step-up acquisition of BIGLIFE Sdn Bhd; (b) g oodwill arising from consolidation of PT Indonesia AirAsia ("IAA") amounted to RM38 million; and (c) l anding rights arising from consolidation of IAA and AirAsia Inc ("PAA") amounted to RM375 million and RM69 million, respectively. We focused on the impairment assessment of the intangible assets due to the magnitude of the balance and the subjectivity involved. Specifically, we focused on the assumptions applied in respect of revenue growth, cost escalation rates, terminal value and discount rates. Independent Auditors' Report to theMembers of AirAsiaGroupBerhad (Incorporated inMalaysia) 174 AIRASIA GROUP BERHAD