MEDICURE INC | CIK:0001133519 |

ifrs-full:DisclosureOfDiscontinuedOperationsExplanatory

A discontinued operation is a part of the Company’s business that has been disposed of or has been classified as held for sale and that represents a major line of its business or geographic area of operation, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resell. The results of discontinued operations are presented separately on the face of the consolidated statements of net income and comprehensive income and the assets and liabilities are presented separately on the face of the consolidated statements of financial position as held for sale until the sale occurs. During 2017, the Company classified the active pharmaceutical ingredients line of business, which consists of the Apicore business, as discontinued operations. Upon the occurrence of discontinued operations, the net loss of the discontinued operation is presented separately in the consolidated statements of net income and comprehensive income, net of tax.

Assets are classified as held for sale when it is expected that their carrying value will be recovered principally through sale rather than their continued use. For this to be the case, the asset must be available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such asset and a sale must be highly probable.

For the sale to be highly probable, management and the Board of Directors of the Company must be committed to a plan to sell the asset, and an active program to locate a buyer and complete the plan must have been initiated. The asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value and the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Assets held for sale that were previously classified as non-current assets are recorded at the lower of carrying value or fair value less costs to sell and non-current liabilities classified as held for sale are recorded at their carrying value. Assets held for sale are no longer amortized. The consolidated statement of financial position is not restated for the comparative period.

On October 2, 2017, the Company sold its interests in Apicore (the “Apicore Sale Transaction”) to an arm’s-length, pharmaceutical company (the “Buyer”). The Company acquired Apicore in a series of transactions occurring between July 3, 2014 and July 12, 2017 as described in note 4.

Under the Apicore Sale Transaction, the Company received a closing payment of U.S.$57,623,125 upon the closing of the transaction. Additional working capital and deferred payments of U.S.$52,886,588 were received subsequent to December 31, 2017 as part of the Apicore Sales Transaction and have been recorded as consideration receivable as at December 31, 2017. Additionally, a contingent payment in the form of an earn-out based on the achievement of certain financial results by Apicore for the year ended December 31, 2017 could have been received, however the financial results specified under the Apicore Sales Transaction were not achieved. As a result, no amount has been recorded in the consolidated financial statements pertaining to this potential earn-out payment. Additionally, under the Apicore Sale Transaction, the Buyer held an option to acquire Apicore’s Indian operations for a fixed price until December 31, 2017. This option lapsed without exercise and the Company, subsequent to December 31, 2017, sold Apicore’s Indian operations, to a company owned by the former President and Chief Executive Officer of Apicore Inc. The net assets held for sale will be released from accounts payable and accrued liabilities subsequent to year end.

The funds received by the Company under the Apicore Sales Transaction and the funds still to be received reflect the net proceeds after payment of all transaction costs, including commissions and transaction bonuses, the redemption of any outstanding Apicore employee stock options and the redemption of the Class A-1 preferred shares.

Set out below is the financial performance for years ended December 31, 2017 and 2016 relating to the Apicore business:

Set out below is the cash flow information for the years ended December 31, 2017 and, 2016 relating to the Apicore business:

Set out below are the details of the sale of the Apicore business:

Set out below are the carrying amounts of the assets and liabilities of Apicore Inc. as at the date of sale:

In connection with the Apicore Sale Transaction, the Company repaid the $18,507,400 note payable to Apicore Inc., which is included in the total assets of Apicore Inc. at the date of sale above, from cash on hand. The Company had originally obtained the loan from its subsidiary Apicore Inc. in July 2017.

As previously described, the Company retained ownership in Apicore’s Indian operations until the lapse of the Buyer Option and subsequent to December 31, 2017, Apicore’s Indian operations were sold to a company owned by the former President and Chief Executive Officer of Apicore Inc.

Immediately before the classification as discontinued operations, the recoverable amount was estimated for certain items and no impairment loss was identified. As at December 31, 2017, a write-down of $1,791,484 was recognized to reduce the carrying amount of the assets in the disposal group to their fair value less costs to sell. This was recognized in discontinued operations in the statements net income and comprehensive income. Fair value measurement disclosures are provided in note 18.

Set out below are the carrying amounts of the assets and liabilities of Apicore India as at December 31, 2017, which are included in the calculation of the gain on sale: