SEC Form 20-IS - iRemit Global Remittance

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assets or groups of assets, in which case the recoverable amount is assessed as part of the CGU to
which it belongs. Where the carrying amount of an asset (or CGU) exceeds its recoverable
amount, the asset (or CGU) is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset (or CGU). In determining fair value less cost to sell, recent
market transactions are taken into account, if available. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are corroborated by available fair
value indicators.
An impairment loss is charged to operations in the year in which it arises, unless the asset is
carried at a revalued amount, in which case the impairment loss is charged to the revaluation
increment of the said asset.
An assessment is made at each balance sheet date as to whether there is any indication that
previously recognized impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognized impairment loss is
reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognized. If that is the case, the carrying amount of
the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would have been determined, net of depreciation and amortization, had no impairment
loss been recognized for the asset in prior years. Such reversal is recognized in the parent
company statement of income unless the asset is carried at a revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal, the depreciation and
amortization expense is adjusted in future years to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining life.
Input Value Added Tax (VAT)
Input VAT represents VAT imposed on the Parent Company by its suppliers for the acquisition of
goods and services as required by Philippine taxation laws and regulations. This will be claimed
as tax credits. Input VAT is stated at its estimated net realizable values.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Parent Company and the revenue can be reliably measured. The Parent Company assesses its
revenue arrangements against specific criteria in order to determine if it is acting as principal or
agent. The following specific recognition criteria must also be met before revenue is recognized:
Delivery fees
Revenue from delivery fees is recognized as the service is rendered net of amounts payable to
principals (i.e., partner remittance companies) for fees billed on their behalf.
Service revenue
Service revenue is recognized when the service is rendered.
Interest income
Interest on financial instruments measured at amortized cost is recognized based on the EIR
method.
The EIR method is a method of calculating the amortized cost of a financial asset or a financial
liability and allocating the interest income or interest expense over the relevant period. The EIR is
the rate that exactly discounts estimated future cash payments or receipts throughout the expected
*SGVMC116501*