SEC Form 20-IS - iRemit Global Remittance

- 39 -
value of the additional interest acquired was P=4.03 million. The difference of P=20.67 million
between the consideration paid and the noncontrolling interest acquired in LSML was recognized
as goodwill.
Goodwill acquired through business combinations has been allocated to five individual CGUs as
follows:
2011 2010
IGRL P=50,833,394 P=50,991,293
LSML 19,695,652 19,681,102
IAPL 8,555,256 8,624,783
IRCL 7,268,177 7,440,857
WEPL 6,302,861 6,354,083
P=92,655,340 P=93,092,118
The recoverable amount of the CGUs have been determined based on value-in-use calculation
using cash flow projections from financial budgets approved by senior management covering a
five-year period. The discount rates applied to cash flow projections range from 8.55% to 10.60%
in 2011and 7.31% to 8.83% in 2010, and cash flows beyond the five year-period were extrapolated
using a steady growth rate of 1.00% in 2011 and 0.13% to 1.43% in 2010.
The calculation of the value-in-use of the CGUs are most sensitive to the following assumptions:
• Growth rate - The forecasted growth rate is based on a very conservative steady growth rate
that does not exceed the long term average rate for the industry.
• Pre-tax discount rates - Discount rates reflect management’s estimate of the risks specific to
each CGU. This is the benchmark used by management to assess operating performance.
With regard to the assessment of the value-in-use of each CGU, management believes that no
reasonably possible change in any of the above key assumptions would cause the carrying value
of the goodwill to materially exceed its recoverable amount.
14. Software Costs - net and Other Noncurrent Assets
Movements in software costs follow:
2011 2010
Cost
Balance at beginning of year P=12,384,629 P=11,425,409
Additions 2,034,070 852,274
Disposals (941,474) –
Foreign exchange adjustment (237,921) 106,946
Balance at end of year
Accumulated Amortization
13,239,304 12,384,629
Balance at beginning of year 10,302,883 8,720,725
Amortization (Note 12) 2,006,374 1,525,720
Disposals (459,811) –
Foreign exchange adjustment (61,086) 56,438
Balance at end of year 11,788,360 10,302,883
Net Book Value at end of year P=1,450,944 P=2,081,746
*SGVMC116502*