UNITED BREWERIES CO INC | CIK:0000888746 |

Note 18 Goodwill

 

The goodwill movements is detailed as follows:

 

		Goodwill
		ThCh$
As of January 1, 2016
Historic cost			99,490,372
Book Value			99,490,372
As of December 31, 2016
Additions for business combination (1)			234,476
Conversion effect			(2,798,297)
Book Value			96,926,551
As of December 31, 2016
Historic cost			96,926,551
Book Value			96,926,551
As of December 31, 2017
Conversion effect			(2,309,077)
Book Value			94,617,474
As of December 31, 2017
Historic cost			94,617,474
Book Value			94,617,474

 

(1) See Note 1, point (2).

 

Goodwill on investments acquired in business combinations is assigned as of the acquisition date to the Cash Generating Units (CGU), or group of CGUs that it is expected will benefit from the business combination synergies. The carrying amount of goodwill of the investments assigned to the CGUs within the Company’s segments is detailed as follows:

 

Segment		Cash Generating Unit		As of December  31, 2017			As of December  31, 2016
		(CGU)		ThCh$			ThCh$
Chile		Embotelladoras Chilenas Unidas S.A.			25,257,686			25,257,686
		Manantial S.A.			8,879,245			8,879,245
		Compañía Pisquera de Chile S.A.			9,808,550			9,808,550
		Los Huemules S.R.L.			47,443			47,443
		Subtotal			43,992,924			43,992,924
International Business		CCU Argentina S.A. and subsidiaries			5,355,254			6,851,916
		Marzurel S.A., Coralina S.A. and Milotur S.A.			6,956,760			7,260,675
		Bebidas del Paraguay S.A. y Distribuidora del Paraguay S.A.			5,896,392			6,404,892
		Subtotal			18,208,406			20,517,483
Wines		Viña San Pedro Tarapacá S.A.			32,416,144			32,416,144
		Subtotal			32,416,144			32,416,144
Total					94,617,474			96,926,551

 

Goodwill assigned to the CGU is subject to impairment tests annually or with a higher frequency in case there are indications that any of the CGU could experience impairment. The recoverable amount of each CGU is determined as the higher of value in use or fair value less costs to sell. To determine the value in use, the Company has used cash flow projections over a 5-year span, based on the budgets and projections reviewed by Management for the same term and with an average grown-rate of 3%. The rates used to discount the projected cash flows reflect the market assessment of the specific risks related to the corresponding CGU. The pre-tax discount rates used range from a 9.2% to 10.9%. Given the materiality of the amounts involved, it was not considered relevant to describe additional information in this Note. A reasonable change in assumptions would not result in an impairment to goodwill.

 

As December 31, 2017, the Company has not identified any evidence of impairment of goodwill.