SEC Form 20-IS - iRemit Global Remittance

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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 consolidated
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.
Goodwill
Goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of the CGU (or group
of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU (or group of
CGUs) is less than the carrying amount of the CGU (or group of CGUs) to which goodwill has
been allocated, an impairment loss is recognized immediately in the consolidated statement of
income. Impairment losses relating to goodwill cannot be reversed for subsequent increases in its
recoverable amount in future periods. The Group performs its annual impairment test of goodwill
at the balance sheet date.
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
Group and the revenue can be reliably measured. The Group 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 and interest bearing HFT investments
is recognized based on the effective interest rate (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
life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of
the financial asset or financial liability. When calculating the EIR, the Group estimates cash flows
from the financial instrument (for example, prepayment options) but does not consider future
credit losses. The calculation includes all fees and points paid or received between parties to the
contract that are an integral part of the EIR, transaction costs and all other premiums or discounts.
*SGVMC116502*