Page 320 - ACCESS BANK ANNUAL REPORTS_eBook

Intangible Assets
Continued

Cash Flow Forecast
Cash flows were projected based on past experience, actual operating results and the 4-year business plan.
These cashflows are based on the expected revenue growth for the entity over this 4-year period.

Discount Rate
“Pre-tax discount rate of 19.50% was applied in determining the recoverable amounts for the only entity with
goodwill (Access Bank Rwanda). This discount rate was estimated using the risk-free rate and the country risk
premium for Rwanda.“

Long-term term growth rate

“The long term growth rate applied was based on the long term growth rate in GDP of Rwanda

The key assumptions described above may change as economic and market conditions change. The Group
estimates that reasonably possible changes in these assumptions are not expected to cause the recoverable
amount of the subsidiaries (from which the goodwill arose) to decline below their carrying amount.”

Revenue Growth
Revenue growth were projected based on past growth, actual operating income and the company’s 4 year
strategic plan. The revenue growth of 9.6% represents the average revenue growth of 4 years. The revenue
growth was used to project the cashflow for the business.

Sensitivity analysis of key assumptions used 10% 10%
increase decrease
Impact of change in discount rate on value-in-use computation (481,959) 626,557
Impact of change in growth rate on value-in-use computation 85,169 (79,926)
Impact of change in revenue growth on value-in-use computation 490,918 (490,918)

320 Access BAnk Plc
Annual Report & Accounts 2017