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Goodwill | 12 Months Ended
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Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill | 10. GOODWILL The changes in the carrying amount of goodwill by segment for the years ended December 31, 2022 and 2023 are as follows:
|  | Color Cosmetics Brands |  |  | Skincare Brands |  |  | Total |
|  | RMB |
Balance as of December 31, 2021 |  |  | 20,596 |  |  |  | 848,825 |  |  |  | 869,421 |
Increase in goodwill related to acquisition |  |  | 5,266 |  |  |  | - |  |  |  | 5,266 |
Foreign currency translation adjustments |  |  | - |  |  |  | (17,542 | ) |  |  | (17,542 | )
Balance as of December 31, 2022 |  |  | 25,862 |  |  |  | 831,283 |  |  |  | 857,145 |
Foreign currency translation adjustments |  |  | - |  |  |  | 53,461 |  |  |  | 53,461 |
Impairment provided(i) |  |  | - |  |  |  | (354,039 | ) |  |  | (354,039 | )
Balance as of December 31, 2023 |  |  | 25,862 |  |  |  | 530,705 |  |  |  | 556,567 |
(i) The Group tested goodwill for impairment at reporting unit level. Management performed impairment testing of Eve Lom reporting unit using the quantitative impairment method and recorded goodwill impairment loss of RMB 354.0 million for the year ended December 31, 2023. As of December 31, 2023, the gross amount, accumulated impairment losses and net carrying amount of goodwill associated with the Eve Lom reporting unit was RMB 747.0 million, RMB 354.0 million and RMB 393.0 million respectively. Key assumptions used in quantitative impairment test The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. The Group used a discounted cash flow model (“DCF model”) to estimate the fair value of the reporting units, as management believes forecasted operating cash flows were the best indicator of fair value. A number of significant assumptions were involved in the preparation of the DCF models including revenue growth rates, gross profit ratios, the discount rate and terminal value. The financial projection covering a ten-year period of each reporting unit adopted in DCF models for impairment test purpose is based on the financial budgets approved by the management of the Group, which considering the historical performance and its expectation for future market development. Cash flows beyond the ten-year period are extrapolated using a long-term growth rate. Post-tax discount rates reflect market assessment of the weighted average cost of capital in the industry the Group operates and the specific risks relating to the Group. Impairment loss of goodwill recognized for the years ended December 31, 2021, 2022 and 2023 were nil, nil and RMB 354.0 million, respectively. As of December 31, 2021, 2022 and 2023, the original gross amounts of goodwill were RMB 869.4 million, RMB 857.1 million and RMB 910.6 million, respectively, and accumulated impairment losses were nil, nil and RMB 354.0 million, respectively.

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