FORM 20-F Grupo Casa Saba, S.A.B. de C.V.

Table of Contents
Investments in associates are initially recorded at acquisition cost. They are subsequently valued by using the equity method when the Company has significant influence. The
Company uses audited financial statements of the associates for that purpose, prepared in accordance with Mexican FRS. Consequently, the Company records in income the
proportionate share of the gains or losses reported by the associates and in stockholders’ equity, the variations of the other stockholders’ equity accounts. Significant influence is
presumed to exist when equity ranges between 10 percent and 50 percent in public companies, and between 25 percent and 50 percent in non-public companies, unless it is proven that
the Company has significant influence with a lower percentage.
At December 31, 2011 and 2010, the Company incorporated the entity named Sociedad Fondo de Inversion Privado Retail Chile into the accounting consolidation. This entity
exclusively invests in negotiable instruments of FASA or its FASA’s subsidiaries.
The Company does not recognize additional losses when its equity in losses in a subsidiary or associate exceeds its shareholdings, unless there are obligations or commitments that are
legal or assumed by the Company.
d) Statements of income and statements of cash flows
The accompanying statements of income present costs and expenses based on their function, which are presented in generic captions in connection with their contribution to the
different levels of income or loss. The cost of sales is separated from the other costs and expenses to present the level of gross profit.
The statements of cash flows, prepared under the indirect method in a non-inflationary economic environment, present the cash inflows and outflows of the period in nominal monetary
units therefore, they exclude the inflation impact and the unrealized exchange rate fluctuation.
e) Recognition of the impact of inflation on the financial information
i) In accordance with Mexican FRS B-10, “Impact of Inflation” (FRS B-10), the financial statements that recognize the impact of inflation under “comprehensive method” are those
relative to an entity whose functional currency applies to a country in which there is an inflationary economic environment. FRS B-10 recognizes two economic environments, one
results in the recognition of the impact of inflation (inflation equal to or higher than 26 percent accumulated in the three annual prior years) and the other does not (inflation lower that
percentage in the period referred to above). The percentage of inflation of the year and accumulated inflation of the three annual prior years applicable in each country in which the
Company operates, is as follows:
Country Inflation 2011 Accumulated inflation Type of economy
Mexico 3.8 15.4 Non-inflationary
Brazil 6.5 16.7 Non-inflationary
Chile 3.9 6.0 Non-inflationary
Peru 4.7 13.5 Non-inflationary
ii) Pursuant to the foregoing, the Group has not recognized the impact of inflation effective January 1, 2008. Consequently, the accompanying financial statements of income and
cash flows are presented in nominal Mexican pesos. Through December 31, 2007, the Group recognized the effect of restatement regardless of the level of inflation. Toward that end, it
applied the factor derived from the National Consumer Price Index (NCPI) published by the Banco de Mexico for domestic companies and, if applicable, the NCPI of the country of origin
for those that operate abroad. That effect is maintained in the financial statements of the last year reported. Should the economic environment change to inflationary, the Group will
retroactively recognize the impact of inflation not recognized in the periods in which the economic environment was non-inflationary, in accordance with FRS B-10.
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