Strategic Report Strategic Report Strategic Report Financial Additional Overview Strategy Performance Governance Statements Information 13. Goodwill Movements in goodwill during the years ended 31 December 2018, 31 December 2017 and 31 December 2016, were as follows: 2018 2017 2016 Cost 1 January 83,726 135,436 101,434 Business combinations – 60,138 34,002 Demerger (25,981) (111,848) – At 31 December 57,745 83,726 135,436 Accumulated impairment 1 January 28,450 28,450 28,450 Demerger (4,056) – – At 31 December 24,394 28,450 28,450 Net book value: 1 January 55,276 106,986 72,984 At 31 December 33,351 55,276 106,986 Impairment test for goodwill Goodwill acquired through business combinations with indefinite lives have been allocated to two individual cash-generating units, for impairment testing: Corporate Banking and Retail Banking. The carrying amount of goodwill allocated to each of the cash-generating units (“CGU”) is as follows: 2018 2017 2016 Retail Banking 23,386 23,386 23,488 Corporate Banking 9,965 9,965 9,965 P&C Insurance* – 15,454 16,139 Teliani* – 6,471 3,439 Pharmacy* – – 29,025 Healthcare* – – 21,468 Health Insurance* – – 3,462 Total 33,351 55,276 106,986 * Discontinued businesses. Key assumptions used in value in use calculations The recoverable amounts of the CGUs have been determined based on a value-in-use calculation, using cash flow projections based on financial budgets approved by senior management covering a one to three-year period. Discount rates were not adjusted for either a constant or a declining growth rate beyond the three-year periods covered in financial budgets. For the purposes of the impairment test, a 3% permanent growth rate has been assumed when assessing the future operating cash flows of the CGU. The following discount rates were used by the Group for Corporate Banking and Retail Banking: Corporate Banking Retail Banking 2018 2017 2016 2018 2017 2016 Discount rate 4.7% 4.5% 5.3% 6.2% 6.1% 6.9% Annual Report 2018Bank of Georgia Group PLC 235