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Consolidated financial statements COGECO CABLE INC. 2013 75
B) GOODWILL
During fiscal 2013 and 2012, goodwill variations were as follows:
Years ended August 31, 2013 and 2012
(In thousands of Canadian dollars) $
Cost
Balance at September 1, 2011 534,343
Acquisitions through business combinations 1,646
Discontinued operations (325,547)
Balance at August 31, 2012 210,442
Acquisitions through business combinations 934,562
Foreign currency translation adjustment 47,011
Balance at August 31, 2013 1,192,015
Accumulated impairment losses
Balance at September 1, 2011 325,547
Discontinued operations (325,547)
Balance at August 31, 2012 —
Foreign currency translation adjustment —
Balance at August 31, 2013 —
Carrying amounts
At August 31, 2012 210,442
At August 31, 2013 1,192,015
C) IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE
USEFUL LIVES
The Corporation performs impairment tests annually, or more frequently when there is an indication that assets may be impaired, based on
CGUs. For the purpose of impairment testing, goodwill and intangible assets with indefinite useful lives are allocated to each of the Corporation's
CGUs as follows:
At August 31, 2013 2012
Industry segment Group of CGUs Goodwill
Cable
Distribution
Licenses Trade name Goodwill
Cable
Distribution
Licenses
(In thousands of Canadian dollars) $$$$$
Canadian cable services Ontario 4,662 857,696 — 4,662 857,696
Quebec —109,304 ——109,304
American cable services Miami 113,668 196,911 ———
South Carolina 48,425 32,643 ———
Pennsylvania 325,726 327,483 ———
Maryland/Delaware 65,554 43,173 ———
Enterprise services Canada 308,425 —25,723 205,780 —
United States 263,153 — — — —
Europe 62,402 — — — —
Total 1,192,015 1,567,210 25,723 210,442 967,000
At August 31, 2013 and 2012, the Corporation tested the carrying value of goodwill and intangible assets with indefinite useful lives for
impairment. The recoverable amount of each CGU is calculated based on value in use. The value in use was determined using cash flow
projections derived from financial projections covering a five-year period. They reflect management's expectations of revenue growth, expenses
and margin for each CGU based on past experience. Cash flows beyond the five-year period have been extrapolated using an estimated
terminal growth rate determined with regard to projected growth rates for the specific markets in which the CGUs participate and are not
considered to exceed the long-term average growth rates for those markets. Discount rates applied to the cash flow forecasts are derived
from the Corporation's pre-tax weighted average cost of capital, adjusted for the different risk profile of the individual CGUs. The recoverable
amount of each CGU was determined to be higher than its carrying amount and no impairment loss has been recognized at August 31, 2013
and 2012.