|Carrying value at 1 January||809 397||1 048 573|
|Effect of translation to presentation currency||163 139||(239 176)|
|Carrying value at 31 December||972 536||809 397|
The goodwill is primarily attributable to the expected future operational and marketing synergies arising from the business combinations with Silvinit Group and not to individual assets of the subsidiaries and was allocated to cash-generating unit (“CGU”) – PJSC “Uralkali”.The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on actual financial results, budget approved by management and discount rates reflecting time value of money and inherent risks.
Management analysed the impact of changes in key assumptions on the value-in-use amount. Changes in key assumptions which may lead to potential impairment of goodwill are not probable considering current market estimates.
Assumptions used for value-in-use calculations to which the recoverable amount is most sensitive were:
|RR/US$ exchange rate (till 2040)||From 65 to 123||From 67 to 129|
|Growth rate beyond one year||4.0% p.a.||3.0% p.a.|
|US$ weighted average cost of capital||10.9% p.a.||12.7% p.a.|
|Long-term inflation rate||From 3.0% to 6.4% p.a.||From 3.0% to 7.5% p.a.|
The Group did not recognise any impairment of goodwill in the consolidated financial statements for the years ended 31 December 2016 and 31 December 2015.