| 17. | GOODWILL |
| 12.31.2017 | 12.31.2016 | |||||||
|
Cost |
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|
Cofesur S.A. |
18,942,491 | 18,942,491 | ||||||
|
Recycomb S.A.U. |
2,873,689 | 2,873,689 | ||||||
|
La Preferida de Olavarría S.A. |
17,531,254 | 17,531,254 | ||||||
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|
|
|
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|
Total |
39,347,434 | 39,347,434 | ||||||
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|
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Allocation of goodwill to cash-generating units
For purposes of impairment testing, goodwill was allocated to the following cash generating units:
| 12.31.2017 | 12.31.2016 | |||||||
|
Railroad |
18,942,491 | 18,942,491 | ||||||
|
Aggregates |
2,873,689 | 17,531,254 | ||||||
|
Others |
17,531,254 | 2,873,689 | ||||||
|
|
|
|
|
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|
Total |
39,347,434 | 39,347,434 | ||||||
|
|
|
|
|
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Cash-generating unit: Railroad
The recoverable amount of this cash-generating unit is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by the directors covering a five-year period.
The key assumptions used in the value in use calculations for the Railroad cash-generating unit are as follows:
| • | The period covered includes the remaining years of the concession. |
| • | Services rendered: Average of transport capacity usage in the period immediately before the budget period. The values assigned to the assumption reflect past experience and are consistent with the Company’s. The directors believe that the volume for the next five years is reasonably achievable. |
The directors believe that any reasonable possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.
Cash-generating units: Aggregates and Others
The recoverable amount of these cash-generating units is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by the directors covering a five-year period.
The key assumptions used in the value in use calculations for the aggregates and others units are as follows:
| • | Production volume: Average production volume in the period immediately before the budget period. The values assigned to the assumption reflect past experience and are consistent with the Company’s. The directors believe that the volume for the next five years is reasonably achievable. |
| • | Cash flow projections during the budget period are based on the same expected gross margins and raw materials throughout the budget period and beyond that five-year period. |
The directors believe that any reasonable possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating units.