2016 Annual Report For Web 7.3MB

The Company is continuously working on research and development
projects. Development costs capitalized include the development of new
products and the development of new applications of existing products
and prototypes. Research costs and development costs that are not
eligible for capitalization have been expensed and are recognized in
selling, general and administrative expenses.
Intangible assets include patents acquired through business
combinations, which have a remaining life between two and nine years.
All brand names with a carrying amount of $86,526 [2015 – $86,526]
have been classified as indefinite-life intangible assets, as the Company
expects to maintain these brand names and currently no end point of
the useful lives of these brand names can be determined. The Company
assesses the assumption of an indefinite useful life at least annually.
For definite-life intangible assets, the Company assesses whether
there are indicators of impairment at subsequent reporting dates as a
triggering event for performing an impairment test.
Intangible assets and research and development expenses for the
year ended December 31, 2016, are net of combined federal and
provincial scientific research and experimental development [“SR&ED”]
tax credits in the amounts of $35 and $106, respectively. A number
of specific criteria must be met in order to qualify for federal and
provincial SR&ED investment tax credits. As at December 31, 2016,
the Company had federal investment tax credit carryforwards in the
amount of $2,324 [2015 – $2,324], federal SR&ED investment tax credit
carryforwards in the amount of $980 [2015 – $935], provincial SR&ED
investment tax credit carryforwards in the amount of $287 [2015 – $232]
and provincial manufacturing or processing tax credits in the amount of
$448 [2015 – $439]; these began expiring in 2015.
Other significant intangible assets are goodwill [note 12] and the
distribution network of the Company. The distribution network was
acquired in past business combinations and reflects the Company’s
dealer network in North America. The remaining amortization period for
the distribution network ranges from 2 to 20 years.
The Company had no contractual commitments for the acquisition of
intangible assets as of the reporting date.
12. GOODWILL
13. IMPAIRMENT TESTING
2016
$
2015
$
BALANCE, BEGINNING OF YEAR 170,262 71,356
Acquisition [note 6] 57,472 93,745
Impairment [note 17] (67) (414)
Exchange differences (217) 5,575
BALANCE, END OF YEAR 227,450 170,262
The Company performs its annual goodwill impairment test as at
December 31. The recoverable amount of the Company’s group of
CGUs has been determined based on value in use for the year ended
December 31, 2016, using cash flow projections covering a five-year
period. The various pre-tax discount rates applied to the cash flow
projections are between 8.8% and 19.0% [2015 – 12.3% and 14.3%] and
cash flows beyond the five-year period are extrapolated using a 3%
growth rate [2015 – 3%], which is management’s estimate of long-term
inflation and productivity growth in the industry and geographies in
which it operates.
The Company’s group of CGUs and goodwill and indefinite-life intangible
assets allocated thereto are as follows, which represents how goodwill
and indefinite-life intangible assets are monitored by management:
2016
$
2015
$
Farm
Goodwill 130,371 127,964
Intangible assets with indefinite lives 69,302 68,502
Commercial
Goodwill 97,079 42,298
Intangible assets with indefinite lives 37,807 18,024
Total
Goodwill 227,450 170,262
Intangible assets with indefinite lives 107,109 86,526
113 CONSOLIDATED FINANCIAL STATEMENTS
FIELD TO CONSUMER
2016 ANNUAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS 114