SEC Form 20-IS - iRemit Global Remittance

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b. Impairment of nonfinancial assets
(i) Investments in subsidiaries and associates
The Parent Company assesses impairment on its investments in subsidiaries and associates
whenever events or changes in circumstances indicate that the carrying amount of the
assets may not be recoverable. Among others, the factors that the Parent Company
considers important, which could trigger an impairment review on its investments in
subsidiaries and associates, include the following:
• deteriorating or poor financial condition;
• recurring net losses; and
• significant changes with an adverse effect on the subsidiary/associate have taken place
during the period, or will take place in the near future, in the technological, market,
economic, or legal environment in which the subsidiary/associate operates.
(ii) Property and equipment and software costs
The Parent Company assesses impairment on property and equipment and software costs
whenever events or changes in circumstances indicate that the carrying amount of the
asset may not be recoverable. The factors that the Parent Company considers important,
which could trigger an impairment review, include the following:
• significant underperformance relative to expected historical or projected future
operating results;
• significant changes in the manner of use of the acquired assets or the strategy for
overall business; and
• significant negative industry or economic trends.
The Parent Company recognizes an impairment loss whenever the carrying amount of the
asset exceeds its recoverable amount. The recoverable amount is determined based on the
asset’s value in use computation, which considers the present value of estimated future cash
flows expected to be generated from the continued use of the asset.
As of December 31, 2011 and 2010, no impairment losses were recognized on the Parent
Company’s nonfinancial assets. The carrying values of the Parent Company’s nonfinancial
assets as of December 31 follow:
2011 2010
Investments in subsidiaries and associates (Note 10) P=295,334,077 P=245,149,252
Property and equipment - net (Note 11) 7,094,474 9,493,115
Software costs - net (Note 12) 1,396,241 1,868,072
c. Estimated useful lives of property and equipment and software costs
The Parent Company reviews the estimated useful lives of property and equipment and
software costs annually based on the expected asset utilization after considering the expected
future technological developments and market behavior. Significant changes in these estimates
resulting from changes in the factors aforementioned could possibly affect the future results of
operations. Any decrease in the estimated useful life of the property and equipment and
software costs would decrease their respective balances and increase the recorded depreciation
and amortization.
*SGVMC116501*