2.b.8) Impairment of property, plant and equipment and intangible assets
To evaluate the impairment of property, plant and equipment and intangible assets, the Group compares their carrying value with their recoverable amount at the end of each year, or more frequently, if there are indicators that the carrying value of an asset may not be recoverable.
In order to assess impairment, assets are grouped into CGU, whereas the assets do not generate cash flows that are independent of those generated by other assets or CGU, considering regulatory, economic, operational and commercial conditions. Considering the above mentioned, the Group’s assets were grouped into nine CGU, which are described below:
| i. | Upstream Segment |
The assets included in this segment have been grouped into four CGU: one of them groups the assets of YPF fields with crude oil reserves, and three of them group the assets of fields with natural gas reserves, according to Argentina’s basins.
| • | CGU Oil; |
| • | CGU Gas – Neuquina Basin; |
| • | CGU Gas – Noroeste Basin; |
| • | CGU Gas – Austral Basin; |
As of December 31, 2016, there were the Gas UGE—Neuquina Basin—YSUR and UGE Gas—Austral Basin—YSUR, which after the operative merger of the YSUR Group with YPF, were incorporated to the UGE Gas—Neuquina Basin and UGE Gas—Austral Basin, both of YPF.
As of December 31, 2015, the Petroleum CGU—YPF Holdings, was in existence; however, such CGU was deconsolidated during fiscal year 2016.
| ii. | Gas and Power Segment |
The assets of this segment have been grouped into three CGU: CGU Gas and Power YPF, which mainly includes the commercialization and regasification of natural gas; CGU Metrogas, which includes assets related to natural gas distribution activities; and CGU YPF EE, which includes the assets related to the generation and commercialization of electric energy. In connection with CGU YPF EE, see Note 3.
| iii. | Downstream Segment |
The assets of this segment have been grouped in the CGU Downstream YPF, which mainly comprises the assets involved in crude oil refining (or supplementing that activity), the petrochemical industry and the marketing of such products.
| iv. | Central Administration and Others |
It includes the AESA CGU, which primarily comprises the assets used for construction purposes related to the activities of the subsidiary.
This aggregation is the best reflection of how the Group currently makes its management decisions for the generation of separate cash flows of the assets.
The recoverable amount is the higher of the fair value less costs of disposal and the value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a rate that reflects the weighted average capital cost employed for the Group.
If the recoverable amount of a CGU is estimated to be less than its carrying amount, the carrying amount of the CGU is reduced to its recoverable amount, and an impairment loss is recognized in the consolidated statement of comprehensive income.
Any impairment loss is allocated to the assets comprising the CGU on a pro-rata basis based on their carrying amount. Consequently, the basis for future depreciation or amortization will take into account the reduction in the value of the asset as a result of any accumulated impairment losses.
Upon the occurrence of new events or changes in existing circumstances, which prove that an impairment loss previously recognized could have disappeared or decreased, a new estimate of the recoverable amount of the corresponding asset is calculated to determine whether a reversal of the impairment losses recognized in previous periods needs to be made. See Note 2.c).
In the event of a reversal, the carrying amount of the asset (or the CGU) is increased to the revised estimate of its recoverable amount so that the increased carrying amount does not exceed the carrying amount that would have been determined in case no impairment loss had been recognized for the asset (or the CGU) in the past.