Composition and movement:

As of December 31, 2024 and 2023, $5,244 thousand and $5,078 thousand respectively, out of the remaining consideration liability are classified in the balance sheet under line-item Current maturities of other liabilities. 

The transaction was analyzed in accordance with IFRS 3 – Business Combinations to first determine whether the acquired assets constitute a business. The Company had applied the concentration test. Based on the concentration test, substantially all of the fair value of the gross assets acquired is concentrated in the customer relationships. As a result, the transaction was treated as asset acquisition.

The following represented the fair value of the identifiable assets as of the acquisition date:

The purchase price allocation was as follows (in thousands):

As of December 31, 2022, the Company identified indicators of impairment since no binding purchase orders had been signed nor significant progress had been made on the purchased customer relationships as was expected upon the purchase date. As a result, management determined that the assets acquired should be fully impaired. As such, for the year ended December 31, 2022, the Company recorded an impairment loss of $8,738 thousand for the assets acquired from Legacy.

For annual impairment testing of goodwill and intangible assets with defined useful life the goodwill and other intangible assets of the Company were allocated to the operating segments which constitute three groups of cash generating units as follow:

The carrying amount as of December 31, 2024 of the goodwill and the intangible assets which were allocated to each cash-generating unit:

The Company performed its annual impairment tests in December 31, 2024 and 2023, respectively. The recoverable amount of each cash generating unit was assessed using the income approach model.

Products and Technology

The recoverable amount of the Products and Technology cash-generating unit (“CGU”) as of December 31, 2024 have been determined based on a value in use calculation using cash flow projection from financial budget approved by senior management covering a five-year period. The discount rate applied to cash flow projection is 24.5% for Products and Technology cash-generating unit. Cash flows beyond the five-year period are extrapolated using a 3% growth rate. As a result of this analysis, the value in use of the Products and Technology cash-generating unit was determined to be lower than their carrying amounts. Thus an impairment in the amount of $ 571 thousand was recognized in Products and Technology Software CGU. The provision was recorded in impairment of goodwill and intangible assets expenses.

Professional Services

The recoverable amount of the Professional Services CGU as of December 31, 2024 have been determined based on a value in use calculation using cash flow projections from financial budget approved by senior management covering a five-year period. The discount rate applied to cash flow projection is 20% for Professional Services cash-generating unit. Cash flows beyond the five-year period are extrapolated using a 3% growth rate. As a result of this analysis, the value in use of the Professional Services cash-generating unit was determined to be higher than their carrying amounts. 

Consulting

The recoverable amount of the consulting a technology platform developed by the Company subsidiary, Comsec Ltd. (“Comsec”), CGUs as of December 31, 2024 have been determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management covering a five-year period. The discount rate applied to cash flow projections is 20% for both the Consulting and distribution and Dstorm cash-generating units. Cash flows beyond the five-year period are extrapolated using a 3% growth rate for both cash generating units. As a result of this analysis, the value in use of the Consulting and distribution and Dstorm cash-generating units were determined to be higher of their carrying amounts.

Key assumptions

The calculation of value in use for all of the cash generating units is most sensitive to the following key assumptions:

Discount rates − Discount rates represent the current market assessment of the risks specific to each cash-generating unit, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity.