16. Goodwill
 
  2018 
R’000 		     2017 
R’000 		  
Carrying value at beginning of year  3 167 700        2 537 036    
Exchange rate adjustments  (20)       (322)   
Acquisition of businesses  1 340 215        634 198    
Disposal of businesses  (44 868)       (3 212)   
Impairment of goodwill  (15 258)       –    
Carrying value at end of year  4 447 769        3 167 700    
Goodwill acquired through business combinations, is allocated for impairment testing purposes to cash-generating units (“CGU”) which reflect how it is monitored for internal management purposes, namely the various segments of the Group. The carrying amount of goodwill was subject to an annual impairment test using either the fair value less costs to sell method or the discounted cash flow basis.                
The carrying amount of goodwill was allocated to CGUs as follows:                
   Services  2 443 508        1 232 448    
   Freight  58 132        58 132    
   Commercial Products  843 822        841 822    
   Office and Print  239 717        242 810    
   Financial Services  231 870        164 848    
   Automotive  249 420        226 455    
   Electrical  128 223        128 223    
   Namibia  230 259        250 144    
   Properties  21 034        21 034    
   Corporate and investments  1 784        1 784    
   4 447 769        3 167 700    

The recoverable amounts of the CGUs were determined using the fair value less cost to sell method, except for Bidvest Namibia which was evaluated using a Discounted Cash Flow (“DCF”) valuation.

The fair value less cost to sell calculation used projected annualised earnings based on actual operating results. A price earnings multiple ranging from 8,0 – 18,1 (2017: 10,0 – 18,1) was applied to obtain the recoverable amount for the business units. The earnings yield is considered to be consistent with similar companies within the various industries in which the CGUs operate. The most significant portion of the Group’s goodwill, relates to the Bidvest Services and Bidvest Commercial Products CGUs. A price earnings multiple of 10,0 (2017: 9,0) was used for the Bidvest Services valuation and 10,0 (2017: 9,3) for the Bidvest Commercial Products valuation. The valuations resulted in a significant surplus over the carrying values of the CGUs and thus the directors believe that a reasonably possible change in the multiple, would not result in an impairment of the carrying value of goodwill.

The recoverable amount for Bidvest Namibia was calculated using the value-in-use method. Projected future cashflows were discounted at the Group’s weighted average cost of capital of 11,0% (2017: 11,0%) and perpetuity growth rate of 5% (2017: 5%). The valuation method is a Level 3 type valuation in accordance with IFRS 13 – Fair Value measurement.