SEC Form 20-IS - iRemit Global Remittance

- 19 -
As of December 31, 2011 the carrying values of Property and equipment and Software costs
follow:
2011 2010
Property and equipment - net (Note 11) P=7,094,474 P=9,493,115
Software costs - net (Note 12) 1,396,241 1,868,072
In 2011, 2010 and 2009, the Parent Company recognized depreciation and amortization in the
statements of income amounting to P=6.54 million, P=8.06 million and P=8.61 million,
respectively.
d. Recognition of deferred tax assets
The Parent Company reviews the carrying amounts of deferred tax assets at each balance sheet
date and reduces it to the extent that it is no longer probable that sufficient taxable income will
be available to allow all or part of the deferred tax assets to be utilized. Significant judgment
is required to determine the amount of deferred tax assets that can be recognized, based upon
the likely timing and level of future taxable income together with future tax planning
strategies.
As of December 31, 2011 and 2010, the Parent Company did not recognize net deferred tax
assets on existing deductible temporary differences amounting to P=2.80 million and
P=2.85 million, respectively. Management believes that it is not highly probable that these
temporary differences will be realized in the future (see Note 23).
e. Present value of net retirement obligation
The cost of defined benefit retirement plan and other post-employment benefits are
determined using actuarial valuations. The actuarial valuation involves making assumptions
about discount rates, expected rates of return on assets, future salary increases, mortality rates
and future retirement increases. Due to the long-term nature of these benefits, such estimates
are subject to significant uncertainty.
The assumed discount rates were determined using the market yields on Philippine
government bonds with terms consistent with the expected employee benefit payout as of the
consolidated balance sheet date. Refer to Note 16 for the details of assumptions used in the
calculation. As of December 31, 2011 and 2010, the Parent Company recognized retirement
asset of P=0.37 million and retirement liability of P=0.78 million, respectively. In 2011, 2010
and 2009, the Parent Company recognized retirement expense amounting to P=5.75 million,
P=2.38 million and P=3.02 million, respectively (see Note 16).
f. Share-based payment transactions
The Parent Company determined the cost of its equity-settled share based program at grant
date using the price earnings multiple model taking into account the terms and conditions
upon which the shares were granted. At yearend, the Parent Company estimates the number
of equity instruments that will ultimately vest. The Parent Company recognized cost of
equity-settled share based payments amounting to P=1.53 million in 2009 (see Note 17). The
vesting period of the stock purchase program ended on September 19, 2009.
*SGVMC116501*