SEC Form 20-IS - iRemit Global Remittance

- 25 -
As of December 31, 2011 and 2010, no impairment losses were recognized on the Group’s
nonfinancial assets, including goodwill. The carrying values of the Group’s nonfinancial
assets follow:
2011 2010
Investments in associates (Note 11) P=23,064,091 P=20,932,236
Property and equipment - net (Note 12) 19,207,458 27,013,308
Goodwill (Note 13) 92,655,340 93,092,118
Software costs - net (Note 14) 1,450,944 2,081,746
c. Estimated useful lives of property and equipment and software costs
The Group reviews the estimated useful lives of property and equipment and software costs
annually based on the expected asset utilization after considering the expected future
technological developments and market behavior. Significant changes in these estimates
resulting from changes in the factors aforementioned could possibly affect the future results of
operations. Any decrease in the estimated useful life of the property and equipment and
software costs would decrease their respective balances and increase the recorded depreciation
and amortization (see Note 2).
As of December 31, 2011 and 2010, the carrying values of Property and equipment and
Software costs follow:
2011 2010
Property and equipment (Note 12) P=19,207,458 P=27,013,308
Software costs (Note 14) 1,450,944 2,081,746
In 2011, 2010 and 2009, the Group recognized depreciation and amortization in the
consolidated statements of income amounting to P=13.27 million, P=14.07 million and
P=14.22 million, respectively.
d. Recognition of deferred tax assets
The Group 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 Group’s recognized deferred tax assets amounted to
P=4.98 million and P=4.23 million, respectively. As of December 31, 2011 and 2010, the
Group’s recognized deferred tax liabilities amounted to P=31,969 and P=29,765, respectively.
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 25).
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.
*SGVMC116502*