Goodwill

12 Months Ended

Dec. 31, 2018

Goodwill [abstract]

Goodwill

7 Goodwill

The carrying amount of goodwill allocated to each of the CGU is as follows:

	31/12/2017		31/12/2018
	US$’000		US$’000
Reebonz Korea		834		834
Invitree		670		670
Translation difference		64		38
		1,568		1,542

The Group performed its annual impairment test on 31 December 2018 and 2017 respectively.

The recoverable amounts of the CGUs have been determined based on value in use calculations using the cash flow projections approved by management covering a five-year period. The growth rate beyond the five-year period did not exceed the long-term average growth rate of the business in which the CGU operates in. The pre-tax discount rate applied to the cash flow projections and the forecasted growth rates used to extrapolate cash flow projections beyond the five-year period are stated below. As the recoverable amounts of the CGUs are estimated to be higher than the carrying amounts by US$20,273,000 (2017: US$31,912,000), no impairment losses were recognized for the years ended 31 December 2018 and 2017.

	31/12/2017						31/12/2018
	Revenue CAGR*		Terminal Growth rates		Pre-tax discount rates		Revenue CAGR*		Terminal Growth rates		Pre-tax discount rates
	%		%		%		%		%		%
Reebonz Korea		15.6		3.0		17.8		16.7		3.0		16.5
Invitree		15.6		3.0		17.3		12.3		3.0		15.9

* Revenue CAGR relates to the revenue compounded annual growth rate for the five-year cash flow projection period.

The calculations of value in use for the CGUs are most sensitive to the following assumption:

a) Revenue - Revenue was projected taking into account the average growth levels experienced over the past five years and the estimated sales volume and price growth for the next five years.

Sensitivity to changes in assumption

The implications of the key assumption of the recoverable amount are discussed below:

a) Revenue - Decreased demand can lead to a decline in revenue. A decrease in the forecasted annual revenue of Reebonz Korea and Invitree by 8% and 7% respectively (31/12/2017: of Reebonz Korea and Invitree by 9% and 12% respectively) would result in impairment.

Information about subsidiaries

The consolidated financial statements of the Group include:

Name of significant subsidiaries	Principal activity	Principal place of business/ Country of incorporation	Percentage of ownership interest
			31/12/2017		31/12/2018
			%		%
Held by the Company
Reebonz Limited	Import, export, wholesale and retail of luxury products	Singapore		100		100
Draper Oakwood Technology Acquisition, Inc. (“DOTA”)	Special purpose acquisition	United States of America		–		100
Held by Reebonz Limited
Reebonz Pty. Ltd. (“Reebonz Australia”)	Provide marketing support and sale of luxury products	Australia		100		100
Reebonz Korea Co., Ltd. (“Reebonz Korea”)*	Import, export, wholesale, retail and rental of luxury products	Korea		49.2		58.4
Held by Reebonz Korea
Invitree Co., Ltd. (“Invitree”)	Sale of luxury products	Korea		90		90

* The Company is entitled to appoint and has the majority of directors who direct key activities of the entity. The Company concluded that it has control over Reebonz Korea as it has power to direct the relevant activities of Reebonz Korea and is exposed to the variable. During the year, the Group increased its shareholding in Reebonz Korea from 49.2% to 58.4%. Refer to Note 30 for further details.