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(Amounts in thousands of Brazilian reais – R$, unless otherwise stated)
As mentioned in Note
1, on January
2, 2008, CBGS Ltda. subscribed 693,480 new common shares without par value of
jointly-controlled entity CBGS, for R$139,045, which represented its fair value as of that date.
As part of payment, CBGS Ltda. delivered all the shares of Orizon and Dativa, totaling R$71,691, consisting of total net assets of R$9,188, transferring goodwill arising on the acquisition of these subsidiaries from third parties, and generating payables of R$67,266 to be paid in within up to two years, as detailed in Note
1.
The balance of goodwill in consolidated is net of the reversal of the unrealized gain in consolidated from the transfer of the shares of Orizon and Dativa totaling R$5,880, also less of the allowance for impairment of goodwill recognized in 2008, which totals R$1,956, consolidated.
At the end of 2008, the Company tested the goodwill for impairment and determined that the balance of goodwill related to its contribution to the joint venture was impaired by R$1,956. The recoverable amount was calculated based on its value in use. The main factor for the impairment of goodwill was Management's reassessment of the profitability prospects of the Health Project.
The impaired goodwill amount was recognized in "Other operating (expenses) income, net", in the 2008 statement of income.
The breakdown of goodwill as of December 31, 2009, is as follows:
| |
Goodwill |
Ownership interest – % |
Net |
| |
|
|
|
| CBGS |
25,631 |
100.00 |
25,631 |
| Prevsaúde |
7,372 |
40.95 |
3,019 |
| Precisa |
3,381 |
40.95 |
1,384 |
| Unrealized income |
|
|
(5,880) |
| Allowance for losses |
(1,956) |
|
(1,956) |
| Total |
|
|
22,198 |
As described in Note
1, on March 16, 2009, indirect subsidiary CBGS acquired all the shares of Prevsaúde and Precisa. The investment recorded by CBGS includes a share premium in the amount of R$10,753, recorded as goodwill. This goodwill is
based on expected future earnings of those Companies, based on the increase in operations expected for the coming years.
Changes in goodwill for the year ended December 31, 2009, are as follows:
| |
2008 |
Additions/
transfers |
Write-offs/
reversals |
2009 |
| |
|
|
|
|
| CBGS |
25.631 |
- |
- |
25.631 |
| Prevsaúde |
- |
3.019 |
- |
3.019 |
| Precisa |
- |
1.384 |
- |
1.384 |
| Allowance for losses |
(1.956) |
- |
- |
(1.956) |
| Unrealized income |
(5.880) |
- |
- |
(5.880) |
| Total |
17.795 |
4.403 |
- |
22.198 |