2012 Annual Report - Prometic - Life Science, Inc.

Impairment of tangible and intangible assets
Whether an asset is impaired requires management to determine whether there is an indication of impairment based on the consideration of
external and internal indicators. If an indication of impairment exists, management must determine if the carrying value of the asset exceeds its
recoverable amount.
The Company’s Therapeutics segment has approximately 34% of the Company’s aggregate capital assets and licenses and patents (2011 - 36%) for
which a nominal amount of revenue was recognized in 2012 and 2011. Supporting a judgment that the indicators of the impairment of these assets
are not present is an assessment of detailed business plans and recent business development activity directly related to these assets.
The Company rewiewed its previous assumptions in relation to the useful life of its assets and concluded that no changes were incurred.
Estimates and assumptions
Fair value of restricted stock units
The fair value of the restricted stock units discussed in note 20 e) based on an estimation of the probability of the successful achievement of a
number of performance conditions, as well as the timing of their achievement. The final expense is only determinable when the outcome will be
known, which will be in 2013.
Accounting for loan modifications
As described in note 18 (b), when the terms of a loan are modified, it is often accounted for as a derecognition of the carrying value of the
pre-modified loan and the recognition of a new loan at fair value. In the determination of fair value, the Company uses a discounted cash flow
technique which includes inputs that are not based on observable market data and inputs that are derived from observable market data. In the
case of its loan modifications, where available, the Company seeks comparable interest rates. If unavailable, it uses those considered appropriate
for the risk profile of a company in the industry.
4. STANDARDS ISSUED BUT NOT YET EFFECTIVE
Standards issued but not yet effective up to the date of issuance of the Company’s financial statements are listed below. This listing of standards and
interpretations issued are those that the Company reasonably expects to have an impact on disclosures, financial position or performance when
applied at a future date. The Company intends to adopt these standards when they become effective.
IAS 1 Financial Statement Presentation – Presentation of Items of Other Comprehensive Income (OCI)
The amendments to IAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or ‘recycled’) to profit or loss at a
future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified. The
amendment becomes effective for annual periods beginning on or after July 1, 2012. The Company is currently evaluating the potential impact of
this new standard.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9 as issued reflects the first phase of the IASB’s work on the replacement of IAS 39, “Financial Instruments: Recognition and Measurement”
and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard is effective for annual
periods beginning on or after January 1, 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets.
The Company is currently evaluating the potential impact of this new standard.
PROMETIC LIFE SCIENCES INC.
IFRS 10 Consolidated Financial Statements
IFRS 10 replaces the portion of IAS 27, “Consolidated and Separate Financial Statements”, that addresses the accounting for consolidated financial
statements. It also includes the issues raised in SIC-12, “Consolidation - Special Purpose Entities”. IFRS 10 establishes a single control model that
applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant
judgment to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the requirements
that were in IAS 27. This standard becomes effective for annual periods beginning on or after January 1, 2013. The Company is currently evaluating
the potential impact of this new standard.
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