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60 COGECO CABLE INC. 2010 Consolidated Financial Statements
A) Intangible assets
During fiscal 2010 and 2009, intangible asset variations were as follows:
2010 2009
Custome
r
relationships
Custome
r
base Total
Custome
r
relationships Customer base Total
(in thousands of dollars) $ $ $ $$$
Balance, beginning of year 32,882 989,552 1,022,434 101,490 989,552 1,091,042
A
mortization (4,776) – (4,776) (10,321) – (10,321)
Impairment (note 7) – – – (60,442) – (60,442)
Foreign currency translation adjustment – – – 2,155 – 2,155
Balance, end of year 28,106 989,552 1,017,658 32,882 989,552 1,022,434
At August 31, 2010 and 2009, the Corporation tested the value of customer base for impairment and concluded that no impairment existed.
B) Goodwill
During fiscal years 2010 and 2009, goodwill variation was as follows:
2010 2009
(in thousands of dollars) $ $
Balance, beginning of year 153,695 487,805
Business acquisition and related adjustments (note 2) – (647)
Recognition of pre-acquisition tax losses (4,432) (6,142)
Impairment (note 7) – (339,206)
Foreign currency translation adjustment (4,568) 11,885
Balance, end of year 144,695 153,695
On November 25, 2009, the Corporation’s subsidiary, Cabovisão, received approval to its request for preservation of tax losses for the taxation
years preceding the 2006 taxation year. Accordingly, the Corporation has adjusted its allocation of the purchase price to reflect the recognition
of additional tax losses incurred prior to the acquisition, in an amount not exceeding management’s best estimate of the level of pre-acquisition
tax losses that will be realized. This adjustment has reduced goodwill by approximately $4.4 million in the year ended August 31, 2010.
Pending resolution of the litigations for taxation years 2003 to 2005 mentioned in note 8, the Corporation will review its estimate periodically to
reflect currently available information and any additional recognition of pre-acquisition tax losses will be recorded as a reduction of goodwill.
At August 31, 2010 and 2009, the Corporation tested the value of goodwill for impairment and concluded that no impairment existed.