Company: INCR
Filing Date: 2025-05-01
Form Type: 20-F
Source: 0001641172-25-007971
Chunk: 190

Company: Intercure Ltd.
Filing Date: 2025-05-01
Form: 20-F
Item: Item 18
Chunk 190
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 thousand and an impairment loss of NIS 63,101 thousand was recognized in 2023. The impairment loss was allocated fully to goodwill and is included in other expenses, net.
 
In December 31, 2024 the recoverable amount of the cash-generating unit was based on its value in use and was determined by discounting the future cash flows to be generated from the continuing use of the unit with the assistance of independent valuers. The test results indicated that the recoverble amount of the cash-generating unit exceeds its carrying amount. Therefore, no additional impairment loss was recognized in 2024.   
C.                            Key                         
     assumptions used in calculation of recoverable amount
----------------------------------------------------------
 
The key assumptions used in the calculation of recoverable amounts are as follows:
 

(1)   Discount
        rate  
--------------
 
The after-tax discount rate was 15.25% (2023: 16.5%) and was estimated based on past experience, and an industry average weighted average cost of capital, which was based on a possible range of debt leveraging of 17% (2023: 7%) at a market interest rate of 10.21% (2023: 9.65%).
 
The after-tax discount rate is based on the risk-free rate for 15-year debentures issued by the government in the relevant market, and adjusted for a risk premium.
 

(2)   Terminal value growth
               rate        
---------------------------
 
A cash flows forecast for 5 years was included in the discounted cash flow model. The long-term growth rate was 3.5%. The terminal value growth rate is consistent with the assumptions that a market participant would make.
 
 
F-36
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Note 10 – Goodwill: (Cont.)
 

D.          Sensitivity       
     to changes in assumptions
------------------------------
 
Below are the effects of the changes in the key assumptions on the recoverable amount:
 

(1)   Discount
        rate  
--------------
 
An increase in the discount rate of 1% will affect the calculation of the unit’s value in use so that it will decrease to NIS 352,232 thousand and the impairment loss will increase in NIS 39 thousand.
 

(2)        Terminal    
      value growth rate
-----------------------
 
A decrease in the terminal value growth rate of 1% will affect the calculation of the unit’s value in use so that it will decrease to NIS 368,352 thousand and the impairment loss will increase in