Goodwill is measured as the excess of the cost of the business combination over the fair value of the acquired assets, liabilities, and

contingent liabilities and is recognized as an asset under intangible assets. For each business combination, TORM elects whether to

measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred and included in administrative expenses. Goodwill is not amortized as it is considered

to have an indefinite useful life, but the recoverable amount of goodwill is assessed annually. For impairment testing purposes, goodwill

is on initial recognition allocated to the cash generating unit expected to benefit from the synergies of the combination. If the

recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is first allocated to

reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the

carrying amount of each asset in the unit. An impairment loss for goodwill is not reversed in a subsequent period.

Other intangible assets consist of software and customer list acquired in connection with the Marine Exhaust Technology A/S

acquisition. Other intangible assets are measured at cost less accumulated amortization and impairment losses. Other intangible assets