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

Table of Contents
At December 31, 2011, 2010 and 2009, the funded status (benefits’ obligation less fair value of plan assets) of the defined benefit pension and other postretirement plans that considers
the unrecognized net transition obligation, negative plan amendments and unrecognized net loss (gain) amounted to Ps.121,417, Ps. 112,954 and Ps. 66,115, respectively, which was
recorded in other comprehensive income, net of income tax. Therefore a reconciliation line item is shown in Note 23).
g) Goodwill
Goodwill recognized under Mexican FRS has been adjusted for U.S. GAAP purposes because beginning January 1, 2002, goodwill is not amortized under U.S. GAAP, while under
Mexican FRS goodwill was amortized until December 31, 2004. Therefore a reconciliation line item is shown in Note 23).
In addition, under U.S. GAAP, the Group assesses goodwill and indefinite-lived intangible assets for impairment annually unless events occur that require more frequent
reviews. Discounted cash flows analyses considering the use of market considerations are applied to assess the possible impairment of goodwill and indefinite life intangible assets. If
an assessment indicates impairment, the impaired asset is written down to its fair value based on the best information available. Considerable judgment is necessary to estimate
discounted future cash flows. Assumptions used for cash flows are consistent with internal forecasts and industry practices. In addition, the growth and discount rates in determining
its projected future cash flows are used by the Group. All these provisions are virtually identical to Mexican GAAP and U.S. GAAP. Differences in other factors explained below led to
different impairment loss or impairment testing results between Mexican FRS and U.S. GAAP.
Under U.S. GAAP, the first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including
goodwill. If the carrying amount of the reporting unit exceeds its fair value, the “second step” of the goodwill impairment test discussed below is applied by the Group to measure the
amount of impairment loss, if any. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the
impairment test is unnecessary.
The second step consists of comparing the “implied fair value” of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount exceeds the implied fair
value, an impairment loss is recognized in an amount equal to that excess. The implied fair value is determined by allocating the fair value of a reporting unit to all of the assets and
liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the
price paid to acquire the reporting unit. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. That
allocation process is performed only for purposes of testing goodwill for impairment.
The situation referred to above, in addition to differences in the determination of the “value in use” by applying the “perpetuity value” (Note 3 n) under Mexican FRS as compared to
U.S. GAAP, as well as differences in the reporting units’ carrying amounts between Mexican FRS and U.S. GAAP, generate, when applicable, different amounts of impairment losses. In
addition, under U.S. GAAP subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the measurement of that loss is completed, while Mexican GAAP
allows the reversal of the recognition of impairment under certain circumstances. Moreover, impairment loss under U.S. GAAP is included in the determination of operating
income. Under Mexican FRS, this item is part of “Other expenses, net”.
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