SEC Form 20-IS - iRemit Global Remittance

- 24 -
As of December 31, 2011, accounts receivable and other receivables are carried in the
consolidated balance sheet at P=0.93 billion and P=0.11 billion, respectively (see Notes 8 and 9).
As of December 31, 2010, accounts receivable and other receivables are carried in the
consolidated balance sheet at P=1.06 billion and P=0.08 billion, respectively. The Group has
assessed that there is no need to recognize impairment losses on its receivables as of
December 31, 2011 and 2010.
b. Impairment of nonfinancial assets
(i) Investments in associates
The Group assesses impairment on its investments in 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 Group considers important, which could
trigger an impairment review on its investments in associates, include the following:
• deteriorating or poor financial condition;
• recurring net losses; and
• significant changes with an adverse effect on the 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 associate operates.
(ii) Goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This
requires an estimation of the recoverable amount, which is the higher of the net selling
price or value in use of the CGU to which the goodwill is allocated.
The Group’s impairment test for goodwill is based on value in use calculations that use a
discounted cash flow model. The cash flows are derived from the budget for the next five
years and do not include restructuring activities that the Group is not yet committed to or
significant future investments that will enhance the asset base of the CGU being tested.
The recoverable amount is most sensitive to the discount rate used for the discounted cash
flow model as well as the expected future cash-inflows and the growth rate used for
extrapolation purposes.
(iii) Property and equipment and software costs
The Group 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 Group 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 Group 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.
*SGVMC116502*