Industrias Bachoco S.A.B. de C.V. | CIK:0001044896 | 3

  • Filed: 4/27/2018
  • Entity registrant name: Industrias Bachoco S.A.B. de C.V. (CIK: 0001044896)
  • Generator: DataTracks
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1044896/000114420418023204/0001144204-18-023204-index.htm
  • XBRL Instance: http://www.sec.gov/Archives/edgar/data/1044896/000114420418023204/bachocob-20171231.xml
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  • ifrs-full:DisclosureOfGoodwillExplanatory

    (15)
    Goodwill
      
     
     
    2017
     
    2016
     
    2015
     
    Balances at beginning of the year
     
    $
    484,877
     
     
    454,295
     
     
    349,764
     
    Business combinations (Note 4)
     
     
    1,042,163
     
     
    -
     
     
    123,933
     
    Goodwill impairment loss
     
     
    -
     
     
    -
     
     
    (38,619)
     
    Foreign currency effects
     
     
    104,054
     
     
    30,582
     
     
    19,217
     
    Balances at end of year
     
    $
    1,631,094
     
     
    484,877
     
     
    454,295
     
     
    Based on market conditions in which the reporting unit operates, the Company’s estimates of fair value indicated an impairment in Ok Farms – Morris Hatchery, Inc. Georgia, resulting in the recognition of a goodwill impairment loss of $38,619 (2,244 thousand dollars) for the year ended December 31, 2015.
     
    The recoverable amount of the cash-generating unit is determined based on a calculation of its value in use, which uses projections of the estimated cash flows based on financial budgets approved by management for a determined projection period, which are discounted using an annual discount rate.
     
    Projections of the cash flows during the budgeted period are based on sales projections which include increases due to inflation, as well as the projection of expected gross margins and operating margins during the budgeted period. Cash flows that exceed such period are extrapolated using an annual stable growth rate, which is the long-term weighted average growth rate for the market in which the cash-generating unit operates.
     
    The assumptions and balances of each cash-generating unit are as follows:
     
    2017
     
    Cash-generating unit
     
    Final
    balance of
    the year
     
    Projection
    period
    (years)
     
    Annual
    discount
    rate
    (%)
     
    Annual
    growth
    rate
    (%)
     
    Bachoco - Istmo and Peninsula regions
     
    $
    212,833
     
     
    5
     
     
    12.52
    %
     
    3.00
    %
    Campi
     
     
    88,015
     
     
    5
     
     
    12.52
    %
     
    3.00
    %
    Ok Farms - Morris Hatchery, Inc. Arkansas
     
     
    65,200
     
     
    5
     
     
    6.14
    %
     
    0.00
    %
    Ok Farms - Morris Hatchery Inc. Georgia
     
     
    110,091
     
     
    5
     
     
    6.14
    %
     
    0.00
    %
    Ok Foods- Albertville Quality Foods, Inc.
     
     
    1,154,955
     
     
    5
     
     
    6.14
    %
     
    0.00
    %
     
     
    $
    1,631,094
     
     
     
     
     
     
     
     
     
     
     
    2016
     
    Cash-generating unit
     
    Final
    balance of
    the year
     
    Projection
    period
    (years)
     
    Annual
    discount
    rate
    (%)
     
    Annual
    growth
    rate
    (%)
     
    Bachoco - Istmo and Peninsula regions
     
    $
    212,833
     
     
    5
     
     
    12.91
    %
     
    2.70
    %
    Campi
     
     
    88,015
     
     
    5
     
     
    12.91
    %
     
    2.10
    %
    Ok Farms - Morris Hatchery, Inc. Arkansas
     
     
    68,449
     
     
    5
     
     
    8.62
    %
     
    0.00
    %
    Ok Farms- Morris Hatchery Inc. Georgia
     
     
    115,580
     
     
    5
     
     
    8.62
    %
     
    0.00
    %
     
     
    $
    484,877
     
     
     
     
     
     
     
     
     
     
     
    2015
     
    Cash-generating unit
     
    Final
    balance of
    the year
     
    Projection
    period
    (years)
     
    Annual
    discount
    rate
    (%)
     
    Annual
    growth
    rate
    (%)
     
    Bachoco - Istmo and Peninsula regions
     
    $
    212,833
     
     
    5
     
     
    9.67
    %
     
    2.70
    %
    Campi
     
     
    88,015
     
     
    5
     
     
    9.67
    %
     
    2.10
    %
    Ok Farms - Morris Hatchery, Inc. Arkansas
     
     
    57,075
     
     
    5
     
     
    9.32
    %
     
    0.00
    %
    Ok Farms- Morris Hatchery Inc. Georgia
     
     
    96,372
     
     
    5
     
     
    9.32
    %
     
    0.00
    %
     
     
    $
    454,295