SEC Form 20-IS - iRemit Global Remittance

- 13 -
Gains or losses arising from the derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the
consolidated statement of income when the asset is derecognized.
Software costs
Software costs are carried at cost less accumulated amortization and any impairment in value. The
cost of the asset is the amount of cash or cash equivalents paid or the fair value of the other
considerations given up to acquire the asset at the time of its acquisition or production. Software
costs are amortized on a straight-line basis over the estimated useful life of three (3) years.
Goodwill
Any excess of the acquisition cost over the fair values of the identifiable net assets acquired is
recognized as goodwill. Goodwill represents the excess of the acquisition cost over the fair value
of their identifiable net assets at the date of acquisition of IRCL, IGRL, IAPL, LSML and WEPL
(see Note 13). Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses. Goodwill is reviewed for impairment annually (see accounting policy on
Impairment of Nonfinancial Assets).
Impairment of Nonfinancial assets
Investments in associates
The Group assesses at each balance sheet date whether there is any indication that its investments
in associates may be impaired. If any indication exists, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value
less cost to sell and its value in use. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.
Property and equipment and software costs
At each balance sheet date, the Group assesses whether there is any indication that its property and
equipment and software costs may be impaired. When an indicator of impairment exists or when
an annual impairment testing for an asset is required, the Group makes a formal estimate of
recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and
its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other 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 evaluation model is
used. These calculations are corroborated with 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
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