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

Table of Contents
Business combinations
IFRS 1 allows IFRS 3, “Business combinations” (IFRS 3) to be applied prospectively, as of the transition date or from a specific date prior to the transition date.
The Company will apply IFRS 3 prospectively to business combinations that occur as of the transition date. Therefore, the business combinations agreed upon prior to the transition
date will not be reestablished. Consequently, the goodwill balance determined in accordance with prior GAAP at the transition date was not affected by the migration. Consequently,
the carrying amount of the assets acquired and liabilities assumed in the business combination will be their attributed cost, in accordance with IFRS on that date.
Tax criteria
Under Mexican FRS, the tax effect related to the adoption of a tax criterion is determined in accordance with a model of likelihoods; therefore, an entity is not required to record a tax
liability, unless a disbursement of economic resources is likely or when the obligation can be estimated reasonably.
In accordance with IFRS, that effect is recognized under the confidence level that a tax position acquires or expects to acquire. Therefore, the tax effect of a position should be
recognized only if it meets the “more likely than not” standard limit to be admitted based on its technical merits (laws, regulations, rules, etc.). Toward this end, the entities assume that
the tax authorities will examine and they will have all the relevant information for each position. If a tax position is not considered as “more likely than not”, no benefit of the position
will be recognized in the financial statements.
Management is about to determine if there are effects associated with uncertain tax liabilities that might result in the recognition of a provision in its opening statement of financial
position under IFRS, which it will apply against the opening balance of retained earnings.
Impact of inflation
In accordance with Mexican FRS B-10, the impact of inflation is recognized when the economic environment of the entity is inflationary (inflation equal to or above 26 percent
accumulated in the three annual prior fiscal years). IAS 29, “Financial Reporting in Hyperinflationary Economy” an economy is hyperinflationary when inflation in that period
approximates or exceeds 100 percent.
The last hyperinflationary period for Mexico was 1997 (Brazilian and Chilean operations were acquired in 2008 and 2010, respectively). Accordingly, the Company will eliminate the
impact of inflation previously recorded in Mexico for the period of 1998 up to December 31, 2007.
b) Exceptions to the retroactive application of other IFRS
Estimates
The estimates in accordance with IFRS at the transition date will be congruent with those carried out for the same date according to prior GAAP (after making the necessary adjustments
to reflect any difference in accounting policies), unless there is evidence that these estimates were erroneous. The Company will review its estimates at the transition date; however, it
estimates that there will be no changes to the estimates made previously.
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