Below is the summary of Prenetics EMEA and ACT Genomics goodwill balance allocated to the Group’s CGUs:


	2022		2021
	$		$
Prevention EMEA within the Prevention segment		—		855,284
Diagnostics EMEA within the Diagnostics segment		—		3,122,781
Cancer genetic testing services within the Diagnostics segment		30,639,976		—
Sales of medical diagnostics products within the Diagnostics segment		3,160,300		—

		33,800,276		3,978,065

CGUs of cancer genetic testing services and sales of medical diagnostics products

The recoverable amounts of the CGU of cancer genetic testing services and the CGU of sales of medical diagnostics products were determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a six-year period. Cash flows beyond the six-year period are extrapolated using the estimated average growth rates stated below. The key assumptions used in the estimation of the recoverable amounts of the two CGUs are set out below. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industries and are based on historical data from external and internal sources.


	2022
CGU of cancer genetic testing services
Pre-tax discount rate		17.7	%
Terminal value growth rate		3.0	%
Average revenue growth rate		31.1	%
CGU of sales of medical diagnostics products
Pre-tax discount rate		15.9	%
Terminal value growth rate		3.0	%
Average revenue growth rate		18.3	%

Pre-tax discount rate represents the current market assessment of the risks specific to the relevant CGU, regarding the time value of money and individual risks of the underlying assets which have not been incorporated in the cash flow estimates. The pre-tax discount rate calculation is based on the specific circumstances of the Group and its operating segments and derived from its weighted average cost of capital (“WACC”). The WACC is calculated based on the weighted value of the cost of equity which is derived from the expected return on investment by the Group’s investors, and the cost of debt which is derived from the market lending rate for peer companies.

At December 31, 2022, the recoverable amounts of the CGU of cancer genetic testing services and the CGU of sales of medical diagnostics products based on the estimated value-in-use calculations were higher than the carrying amounts of the respective CGUs. Accordingly, no
provision for impairment loss for goodwill is considered necessary.

Any reasonably possible changes in the key assumptions used in the value-in-use assessment model would not affect management’s view on impairment at December 31, 2022.

CGUs Prevention EMEA and Diagnostics EMEA

The recoverable amounts of the CGU Prevention EMEA and CGU Diagnostics EMEA were determined based on

value-in-use

calculations. As December 31, 2021, these calculations use cash flow projections based on financial budgets approved by management covering a

ten-year

period. Cash flows beyond the

ten-year

period are extrapolated using the estimated average growth rates stated below.

In September 2022, the Group has implemented a restructuring plan in its UK business so as to streamline the resources on new business opportunity and to allow capacity to pursue other more sustainable business opportunities in the UK. The management considered this triggered indicators of impairment in the CGU Prevention EMEA and CGU Diagnostics EMEA and has performed the impairment assessment. The calculation of recoverable amounts of the CGU Prevention EMEA use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated average growth rates stated below.

The calculation of recoverable amounts of the CGU Diagnostics EMEA use cash flow projections based on financial budgets approved by management covering the expected remaining period of the business.

The key assumptions used in the estimation of the recoverable amounts of the two CGUs are set out below. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industries and are based on historical data from external and internal sources.


	2022		2021
CGU Prevention EMEA

Pre-tax discount rate	16.8	%		16.0	%
Terminal value growth rate	3.2	%		3.0	%
Average revenue growth rate	25.1	%		24.4	%
CGU Diagnostics EMEA
Pre-tax discount rate	16.8	%		13.7	%
Terminal value growth rate	N/A			3.0	%
Average revenue growth rate	N/A			18.4	%

Pre-tax

discount rate represents the current market assessment of the risks specific to the relevant CGU, regarding the time value of money and individual risks of the underlying assets which have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its operating segments and derived from its WACC. The WACC is calculated based on the weighted value of the cost of equity which is derived from the expected return on investment by the Group’s investors, and the cost of debt which is derived from the market lending rate for peer companies.

At December 31, 2021, the recoverable amounts of the CGU Prevention and the CGU Diagnostics based on the estimated value-in-use calculations were higher than the carrying amounts of the respective CGUs. Accordingly, no provision for impairment loss for goodwill was considered necessary.

On September 30, 2022, the CGU Prevention EMEA and CGU Diagnostics EMEA were determined to be impaired and the related full amount of goodwill of $

703,534

and $

2,568,719

were impaired, respectively. The impairment loss has been included in profit or loss under restructuring costs in relation to diagnostic business (see note 8(c)).