Goodwill

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Goodwill

22 Goodwill

	2019		2018
	RMB million		RMB million
Cost and carrying amount:		237		237

Impairment tests for cash-generating units containing goodwill

	2019		2018
	RMB million		RMB million
Southern Airlines Group Import and Export Trading Company (“SAIETC”)		182		182
Xiamen Airlines Culture and Media Co., Ltd. (“XACM”)		55		55
Total		237		237

The recoverable amount of the CGU is determined based on value-in-use calculation. The calculation uses 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 an estimated weighted average growth rate which does not exceed the long-term average growth rates for the business in which the CGU operates.

The cash flows of the above entities are discounted using pre-tax discount rates ranging from 10.5% to 13.5% (2018: 10.5% to 13.5%).