Cogeco 2014 Annual Report Download - page 82

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Consolidated financial statements COGECO CABLE INC. 2014 81
B) GOODWILL
During fiscal 2014 and 2013, goodwill variations were as follows:
Years ended August 31, 2014 and 2013
(In thousands of Canadian dollars) $
(restated, Note 6)
Cost
Balance at September 1, 2012 210,442
Acquisitions through business combinations 932,669
Foreign currency translation adjustments 46,120
Balance at August 31, 2013 1,189,231
Foreign currency translation adjustments 31,298
Balance at August 31, 2014 1,220,529
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, 2014 2013
Operating segment CGU Goodwill
Cable
Distribution
Licenses Trade name Goodwill
Cable
Distribution
Licenses Trade name
(In thousands of Canadian dollars) $ $ $ $ $ $
(restated, Note 6) (restated, Note 6)
Canadian cable services Ontario 4,662 857,696 —4,662 857,696 —
Québec —109,304 ——109,304 —
American cable services South Florida 117,371 203,325 —113,668 196,911 —
South Carolina 50,002 33,706 —48,425 32,643 —
Western Pennsylvania 336,336 338,150 —325,726 327,483 —
Maryland/Delaware 67,689 44,579 —65,554 43,173 —
Enterprise data services Cogeco Data Services 205,780 ——205,780 ——
Peer 1 Hosting 438,689 — 25,934 425,416 — 25,934
Total 1,220,529 1,586,760 25,934 1,189,231 1,567,210 25,934
At August 31, 2014 and 2013, 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 profiles 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, 2014 and 2013.