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

Intangible assets with indefinite useful life, including goodwill, are subject to periodic impairment tests by determining the recoverable amount of the reporting units, which consists of
higher between of the reporting units’ fair value less the cost of sale related, and the reporting units’ value in use represented by the discounted amount of estimated future cash flows
to be generated by such reporting units to which goodwill relates. Management takes into account a horizon whose projections do not establish growth rates beyond five years, unless
a greater period is justified. We determine the fair value by using methodologies generally accepted in the market to determine the value of entities. Moreover, we monitor the lives
assigned to these long-lived assets for purposes of amortization. This analysis is subjective and form part to the determination of whether impairment has occurred.
Significant judgment is required to appropriately assess the recoverable amount. Management considers that the value in use through its cash flow projections is the best estimate of
future cash flows from continued use of the cash generating unit. Therefore, the cash flows projections models recognize medium and long-term economic variables fairly at the time of
calculation which are related to future estimated price of products, changes in operating expenses, industry economic trend, the growth expectation in the market, as well as the discount
rates and rates of growth rates applied in perpetuity.
Under U.S. GAAP, 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. If the carrying amount
exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess. Under Mexican FRS “perpetuity value” is applied.
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) to our financial statements) 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, originate, when applicable, different
amounts of impairment losses.
Based on the results of goodwill impairment testing at December 31, 2009 under U.S. GAAP, the Group recorded an estimated impairment loss in connection with its reporting unit in the
Brazil in the amount of Ps. 109,000 which differs from impairment loss under Mexican FRS due to referred to above. Under Mexican FRS, goodwill impairment loss was determined in the
amount of Ps. 210,000. In 2010, the Group determined the fair value of a reporting unit exceeds its carrying amount of goodwill and indefinite-lived intangible assets, under USGAAP
and Mexican FRS. In 2011 under USGAAP, the Group recorded an estimated impairment loss in connection with its reporting units in Drogueros and Citem in the amount of Ps.46,210,
Ps.56,456, respectively. Under Mexican FRS, goodwill impairment loss was determined in the amount of Ps. 78,425 and Ps. 56,456, respectively.
This impairment loss concurred with the generalized crisis in the economic environment that had a negative impact on the pharmaceutical industry. In determining whether it is more
likely than not that a goodwill impairment exists, the Group will consider whether there are any adverse qualitative factors indicating that an impairment may exist.
While we believe that our estimates are reasonable, different assumptions could affect our evaluation. We can give no assurance that our expectations will not change as a result of new
information or developments.
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