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

Table of Contents
b) Statement of cash flows
At December 31, 2011, 2010, and 2009, the statements of cash flows prepared under the indirect method in a non-inflationary economic environment presents cash inflows and outflows
of the period which do not include the impact of inflation of the period, and therefore, the amounts of statements of cash flows are presented in nominal Mexican pesos. Accordingly,
the statements of cash flows prepared in accordance with Mexican FRS present substantially the same information as required under U.S. GAAP as interpreted by “Statement of Cash
Flows” (ASC 230), except for the recognition in operating, financing and investing activities of the U.S. GAAP adjustments which are not material. Therefore, the Group considers that
no reconciliation is needed.
Should the economic environment change to inflationary, the Group will retrospectively recognize the impact of inflation not recognized in the periods in which the economic
environment was non-inflationary, in accordance with Mexican FRS B-10. Accordingly, the statements of cash flows will recognize its appropriate presentation when the financial
statements are restated to constant Mexican pesos in accordance with the FRS B-10 (Note 3 e). Under ASC 230, a statement of cash flows presents only cash movement and excludes
non-cash items. This standard does not provide guidance on inflation-adjusted statements of cash flows.
c) Deferred income tax
i) In accordance with currently tax legislation in Mexico, the IETU Law co-exists with the Income Tax Law for determining the taxes on earnings for the period. Therefore, the
Mexican entities pay Income Tax or IETU, whichever is higher. At December 31, 2011, Management performed an analysis to determine the tax base on which the Group will assess its
operations when there is more than one tax base in the same jurisdiction. Accordingly, the Group recognizes deferred taxes on earnings based on the tax regime that is expected to
prevail in the future. At December 31, 2011, Management determined that income tax will be the tax on earnings that will be paid by in the short and medium-term, instead of
IETU. Accordingly, the companies accounted for the deferred income tax effect, in accordance with Mexican FRS D-4, “Taxes on earnings” and its related IFRS-8, “Effect of Corporate
Flat Tax”.
The Group determines the deferred income tax effect under Mexican FRS in a manner similar to U.S. GAAP by using the “asset and liability method”, by applying tax laws and income tax
rates which are enacted or substantially enacted at the closing date of the financial statements to the total temporary differences, as well as tax loss carryforwards and tax credits.
Nevertheless the foregoing, there are specific differences as compared to the calculation under ASC 740, “Accounting for Income Taxes”, as follows: (i) Under Mexican FRS, inflation
effects on the balance of deferred taxes generated by monetary items are recognized in the income statement as part of the monetary position result when entities operate in an
inflationary economic environment. Under U.S. GAAP, the deferred taxes balance is classified as a nonmonetary item. As a result, the consolidated income statement differs with respect
to the presentation of the gain or loss on monetary position and deferred income taxes provision; (ii) should the economic environment change to inflationary, the Group will
retrospectively recognize the impact of inflation on the deferred income tax not recognized in the periods in which the economic environment was non-inflationary, in accordance; and
(iii) the effects of deferred income tax on the reconciling items between Mexican FRS and U.S. GAAP.
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