The movements in the net carrying amount of goodwill are as follows:

Gross carrying value
Balance at 1 January47,92746,412
Fair value amendment relating to prior year acquisition227
Acquired through business combinations9,7841,515
Balance at 31 December57,93847,927
Accumulated impairment
Balance at 1 January
Impairment charge
Balance at 31 December
Carrying amount at 31 December57,93847,927

The goodwill acquired during the year relates to the acquisition of Hydraulics and Transmissions Limited, Hewi Slangen, Hi-Power Hydraulics, Hi-Power Limited, Orange County Limited, The Hydraulic Group BV and Group HES Limited; see note 24.

The acquisitions have been recognised in the three operating segments as follows:

Flowtechnology £000Power Motion Control
Hydraulics and Transmissions Limited (note 24.1)2,4472,447
Hewi Slangen (note 24.2)175175
Hi-Power Limited (note 24.3)564564
Hi-Power Hydraulics (note 24.4)33
Orange County Limited (note 24.5)2,7902,790
The Hydraulics Group BV (note 24.6)1,9181,918
Group HES Limited (note 24.7)1,8871,887
Total goodwill acquired through business combinations1756,8192,7909,784

Goodwill analysed by segment is as follows:

Flowtechnology UK (Fluidpower Limited, Flowtechnology Cz Limited, Flowtechnology Benelux B.V.)43,33043,516
Power Motion Control (PMC Fluidpower Group Limited, PMC Fluidpower Limited, Nelson Hydraulics Limited, Hi-Power Limited, The Hydraulic Group BV)10,8644,043
Process (Process Fluidpower Limited)3,744728
Total at 31 December57,93847,927

Impairment testing

For the purpose of annual impairment testing, goodwill is allocated to the Group's individual statutory trading entities, as they are deemed to be cash generating units. It is anticipated that the Group's cash generating units will be reviewed during the year ending 31 December 2018, as it is expected that the entities will start to benefit from the synergies of the business combinations on which the goodwill arises and will be integrated.

Recoverable amounts for each cash generating unit (CGU) are based on value in use.

Growth rates

The value in use is calculated from cash flow projections based on the Group's forecasts for the year ending 31 December 2018, which are extrapolated for a further four years*. The Group's latest financial forecasts, which cover a three year period, are reviewed by the Board.

* Using growth rates as follows: Fluidpower Limited and Flowtechnology Benelux: 5.7%; PMC Fluidpower Limited, The Hydraulic Group BV, Hi-Power Limited and Nelson Hydraulics Limited: 7.2%; Process Fluidpower Limited: 1.5%

Discount rates

The pre-tax discount rate used to calculate value is 9% (2016: 11%). This discount rate is derived from the Group's weighted average cost of capital.

Cash flow assumptions

The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins. Changes in selling prices and direct costs are based on past experience and expectations of future changes in the market. The growth rates used in the value in use calculation reflect the average growth rate experienced by the Group for the industry.

In respect of the goodwill attributed to Fluidpower Limited, the headroom compared to the carrying value exceeds £29 million. Increasing the discount rate to 22% and leaving all other factors the same would lead to the recoverable amount being equal to the carrying value of the goodwill attributed to Fluidpower Limited.

The Directors do not believe that any other reasonably possible changes in the value of the key assumptions noted above would cause a CGU's carrying amount to exceed its recoverable amount.