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

Table of Contents
m) Property and equipment
Property and equipment are initially recorded at acquisition cost. During high inflationary periods, those assets are restated by using NCPI factors applicable to the country where
those assets are established, in accordance with Mexican FRS B-10. Through December 31, 2007, the last date on which the Group operated in an inflationary economic environment,
the value of those assets was restated by using the applicable NCPI factors.
Depreciation is calculated on the value of property and equipment restated when the economic environment is inflationary, as well as on the acquisition cost when the economic
environment is not inflationary, in accordance with Mexican FRS B-10, by applying the straight-line method based on the remaining economic useful life thereof. The carrying value of
leasehold improvements are amortized on a straight-line method, in accordance with the period set forth in the agreement.
The Group periodically assesses the carrying value of long-lived tangible and intangible assets, including goodwill and permanent investments in associates, to establish whether
significant adverse events, changes in the operating business environment and/or changes in expectations regarding operating income for each cash generating unit, indicate that the
carrying value of those assets may not be recoverable, in accordance with Mexican Bulletin C-15, “Impairment of the value of long-lived assets and their related disposal” (Bulletin C-
15). In such event, an impairment loss is determined by the excess of the carrying value of long-lived assets over the “value in use”, which consists of determining the net present value
of estimated cash flows to which those assets relate. The impairment loss, if any, is recorded as a charge to operations in “Other expenses, net” in the period when such an assessment
is carried out, unless indications noted are of a temporary nature. Mexican Bulletin allows the reversal of the recognition of impairment under certain circumstances. At December 31,
2011 and 2010, Management determined that there were no impairment indications on the carrying value of property and equipment and investments in associates.
Property and equipment available-for-sale are included in “Other current assets” and assessed on the date on which the sales plan is approved at the lower of its net carrying value and
its fair value, less associated sales costs. Those assets are not subject to depreciation.
Effective 2011, the Group adopted retrospectively the new Mexican FRS C-6, “Property, plant and equipment” that supersedes Bulletin C-6, “Property, machinery and
equipment”. That adoption had no impact on the consolidated financial statements.
n) Business acquisitions, intangible assets and goodwill
i) Business acquisitions
The Company recognizes business acquisitions based on Mexican FRS B-7, “Business acquisitions” (FRS B-7). Consequently: (i) the purchase method is used as the sole valuation
standard by allocating the purchase price to the net assets acquired and the noncontolling interest based on their estimated fair value at the acquisition date; (ii) intangible assets
acquired are identified and recognized at its estimated fair value; (iii) the unallocated portion of the purchase price that is not identifiable is included as goodwill, which is allocated to
the cash flow generating unit in order to periodically evaluate the impairment. If applicable, the goodwill value is adjusted for any correction to the preliminary value allocated to the net
assets acquired and the noncontrolling interest, within the twelve months subsequent to the acquisition date; and (iv) valuation is performed at fair value with certain exceptions, in
which case the pertinent Mexican IFRS is applied. Acquisition and/or restructuring costs and expenses are expensed when incurred.
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