SEC Form 20-IS - iRemit Global Remittance

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d. Discontinued Operations
Management has assessed that the Italy operations disposed by IRCGmbH in 2011 constitutes
a disposal group as its business operations and cash flows can be clearly distinguished
operationally (see Note 28).
e. Contingencies
The Group is currently involved in various proceedings. The estimate of the probable costs
for the resolution of these claims has been developed in consultation with outside counsel
handling the defense in these matters and is based upon an analysis of potential results. The
Group currently does not believe these proceedings will have a material effect on the Group’s
financial position. It is possible, however, that future results of operations could be materially
affected by changes in the estimates or in the effectiveness of the strategies relating to these
proceedings (see Note 29).
f. Determination of whether the Group is acting as a principal or an agent
The Group assesses its revenue arrangements against the following criteria to determine
whether it is acting as a principal or an agent:
• whether the Group has primary responsibility for providing the goods and services;
• whether the Group has inventory risk;
• whether the Group has discretion in establishing prices; and
• whether the Group bears the credit risk.
If the Group has determined it is acting as a principal, revenue is recognized on a gross basis
with the amount remitted to the other party being accounted for as part of costs and expenses.
If the Group has determined it is acting as an agent, only the net amount retained is recognized
as revenue.
The Group assessed its revenue arrangements and concluded that it is acting as principal in
some arrangements and as an agent in other arrangements.
g. Going concern
The Group’s management has made an assessment of the Group’s ability to continue as a
going concern and is satisfied that the Group has the resources to continue in business for the
foreseeable future. Furthermore, management is not aware of any material uncertainties that
may cast significant doubt upon the Group’s ability to continue as a going concern. Therefore,
the financial statements continue to be prepared on the going concern basis.
Estimates
a. Credit losses on receivables
The Group reviews its receivables at each balance sheet date to assess whether an allowance
for credit losses should be recorded in the consolidated balance sheet. In particular, judgment
by management is required in the estimation of the amount and timing of future cash flows
when determining the level of allowance required. Such estimates are based on assumptions
about a number of factors such as the length of the Group’s relationship with counterparties
(e.g., agents and couriers), current credit status, average age of accounts, collection and
historical loss experience. Actual results may differ, resulting in future changes to the
allowance.
*SGVMC116502*