14.	GOODWILL AND INTANGIBLE ASSETS

	Goodwill US$‘000			Development costs US$‘000			Patents and licences US$‘000			Other US$‘000			Total US$‘000
Cost
At January 1, 2019		81,689			146,772			9,947			34,228			272,636
Additions		—			9,569			4			38			9,611
Disposals or retirements		—			—			—			—			—
Exchange adjustments		—			36			—			—			36

At December 31, 2019		81,689			156,377			9,951			34,266			282,283

At January 1, 2020		81,689			156,377			9,951			34,266			282,283
Additions		—			6,896			30			89			7,015
Disposals or retirements		(2,507	)		(34,318	)		(1,034	)		(1,044	)		(38,903	)
Reclassification		—			—			—			—			—
Exchange adjustments		—			22			—			—			22

At December 31, 2020		79,182			128,977			8,947			33,311			250,417

Accumulated amortisation and Impairment losses
At January 1, 2019		(65,548	)		(120,507	)		(9,814	)		(23,816	)		(219,685	)
Charge for the year		—			(1,182	)		(2	)		(1,184	)		(2,368	)
Disposals or retirements		—			—			—			—			—
Impairment losses		(3,550	)		(11,904	)		(3	)		(1,113	)		(16,570	)
Exchange adjustments		—			(6	)		—			—			(6	)

At December 31, 2019		(69,098	)		(133,599	)		(9,819	)		(26,113	)		(238,629	)

At January 1, 2020		(69,098	)		(133,599	)		(9,819	)		(26,113	)		(238,629	)
Charge for the year		—			(959	)		(5	)		(439	)		(1,403	)
Disposals or retirements		2,507			34,318			1,034			1,044			38,903
Impairment losses		—			(15,287	)		—			(135	)		(15,422	)
Exchange adjustments		—			(6	)		—			—			(6	)

At December 31, 2020		(66,591	)		(115,533	)		(8,790	)		(25,643	)		(216,557	)

Carrying amounts
At December 31, 2020		12,591			13,444			157			7,668			33,860

At December 31, 2019		12,591			22,778			132			8,153			43,654

Included within development costs are costs of US$6,980,000 which were not amortised in 2020 (2019: US$3,719,000). These development costs are not being amortised as the projects to which the costs relate were not fully complete at December 31, 2020 or at December 31, 2019. As at December 31, 2020 these projects are expected to be completed during the period from January 1, 2021 to December 31, 2023 at an expected further cost of approximately US$8,798,000.

The following represents the costs incurred during each period presented for each of the principal development projects:

Product Name	2020 US$’000	2019 US$’000
HIV screening rapid test	2,278	2,587
Premier Instrument for Haemoglobin A1c testing	1,359	1,930
Autoimmune Smart Reader	666	1,325
Syphilis point-of-care test	618	870
Uni-Gold antigen improvement	556	691
COVID tests	467	-
Mid-tier haemoglobins instrument	243	63
Tri-stat point-of-care instrument	203	361
Column enhancement	151	236
Ultra Genesys	139	237
Sjögrens tests	99	135
G-6-PDH test	-	582
Uni-gold test	-	376
Other projects	117	176
Total capitalised development costs	6,896	9,569

All of the development projects for which costs have been capitalised are judged to be technically feasible, commercially viable and likely to produce future economic benefits. In reaching this conclusion, many factors have been considered including the following:

(a)

The Group only develops products within its field of expertise. The R&D team is experienced in developing new products in this field and this experience means that only products which have a high probability of technical success are put forward for consideration as potential new products.

(b)

A technical feasibility study is undertaken in advance of every project. The feasibility study for each project is reviewed by the R&D team leader, and by other senior management depending on the size of the project. The feasibility study occurs in the initial research phase of the project and costs in this phase are not capitalised.

(c)

Nearly all of our new product developments involve the transfer of our existing product know-how to a new application. The Group does not engage in pure research. Every development project is undertaken with the intention of bringing a particular new product to market for which there is an expected demand.

(d)

The commercial feasibility of each new product is established prior to commencement of a project by ensuring it is projected to achieve an acceptable income after applying appropriate discount rates.

Other intangible assets

Other intangible assets consist primarily of acquired customer and supplier lists, trade names, website and software costs.

Amortisation

Amortisation is charged to the statement of operations through the selling, general and administrative expenses line.

Impairment testing for intangibles including goodwill and indefinite lived assets

Goodwill and other intangibles are subject to impairment testing on an annual basis. The recoverable amount of seven CGUs is determined based on a value-in-use computation. Among other macroeconomic considerations, the impact of the COVID-19 pandemic has been factored into our impairment testing.

The value-in-use calculations use cash flow projections based on the 2021 projections for each CGU and a further four years projections using estimated revenue and cost average growth rates of between 0% and 12%. At the end of the five year forecast period, terminal values for each CGU, based on a long term growth rate of 2%, are used in the value-in-use calculations. The value-in-use represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to each CGU. The pre-tax discount rates used range from 16% to 44% (2019: 20% to 27%).

Sources of estimation uncertainty

The cash flows have been arrived at taking into account the Group’s financial position, its recent financial results and cash flow generation and the nature of the medical diagnostic industry, where product obsolescence can be a feature. However, expected future cash flows are inherently uncertain and are therefore liable to material change over time. The key assumptions employed in arriving at the estimates of future cash flows factored into impairment testing are subjective and include projected EBITDA margins, net cash flows, discount rates used and the duration of the discounted cash flow model. Significant under-performance in any of the Group’s major CGUs may give rise to a material impairment which would have a substantial impact on the Group’s income and equity.

2020 impairment test

The impairment test performed as at December 31, 2020 identified an impairment loss in three CGUs, namely Primus Corp., Biopool US Inc, and Trinity Biotech Do Brasil.

The table below sets forth the impairment loss recorded for each of the CGU’s:

	December 31, 2020		December 31, 2019
	US$’000		US$’000
Primus Corp		16,706		5,321
Trinity Biotech Do Brasil		919		1,253
Biopool US Inc.		154		210
Trinity Biotech Manufacturing Limited		-		9,732
Immco Diagnostics Inc		-		6,332
Clark Laboratories Inc.		-		727
Mardx Diagnostics Inc.		-		720
		17,
Total impairment loss		17,779		24,295

Primus Corporation, which recorded the largest impairment loss of any CGU in this financial year, has been particularly impacted by the pandemic and changes to its product offering. Trinity Biotech Do Brasil also incurred a significant impairment loss in 2020 as this CGU continues to be impacted by the weakness of the Brazilian Real.

The table below sets forth the breakdown of the impairment loss for each class of asset:

	December 31, 2020		December 31, 2019
	US$’000		US$’000
Goodwill and other intangible assets (see Note 14)		15,422		16,570
Property, plant and equipment (see Note 13)		1,795		6,349
Prepayments (see Note 18)		562		1,376

Total impairment loss		17,779		24,295

The value-in-use calculation is subject to significant estimation, uncertainty and accounting judgements and is particularly sensitive in the following areas;

•

In the event that there was a reduction of 10% in the assumed level of future growth in revenue growth rate, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss recorded of US$384,000 at December 31, 2020.

•

In the event there was a 10% increase in the discount rate used to calculate the potential impairment of the carrying values, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss recorded of US$1,504,000 at December 31, 2020.

Significant Goodwill and Intangible Assets with Indefinite Useful Lives

CGUs or combinations of CGUs for which the carrying amount of goodwill is significant for the purposes of impairment testing in comparison with the Group’s total carrying amount of goodwill are those where the percentage is greater than 20% of the total.

The additional disclosures required for the CGU with significant goodwill are as follows:

Fitzgerald Industries	December 31, 2020			December 31, 2019
Carrying amount of goodwill (US$’000)		12,591			12,591
Discount rate applied (real pre-tax)		19.98	%		20.42	%
Excess value-in-use over carrying amount (US$’000)		7,915			2,385
% EBITDA would need to decrease for an impairment to arise		31.98	%		12.11	%
Long-term growth rate		2.0	%		2.0	%

The key assumptions and methodology used in respect of this CGU are consistent with those described above. The assumptions and estimates used are specific to the individual CGU and were derived from a combination of internal and external factors based on historical experience.

Intangible Assets with Indefinite Useful lives (included in other intangibles)	December 31, 2020 US$‘000		December 31, 2019 US$‘000
Fitzgerald Industries International CGU
Fitzgerald trade name		970		970
RDI trade name		560		560
Primus Corporation CGU
Primus trade name		365		500
Immco Diagnostic CGU
Immco Diagnostic trade name		2,938		2,938
Total		4,833		4,968

The trade name assets purchased as part of the acquisition of Fitzgerald in 2004, Primus and RDI in 2005 and Immco Diagnostics in 2013 were valued using the relief from royalty method and based on factors such as (1) the market and competitive trends and (2) the expected usage of the name. It was considered that these trade names will generate net cash inflows for the Group for an indefinite period.

In 2020, an impairment loss of US$135,000 was allocated against the Primus trade name as the carrying value of the CGU’s net assets exceeded its discounted future cashflows.