2020 Annual Report
2020 ANNUAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
a) Depreciation expense for the years ended December 31, 2020 and 2019 totaled $4,274,545 and $3,561,523,
respectively, of which an amount of $3,847,091 and $3,191,175, respectively, was recorded under the cost of services
line item, and the complement of $427,454 and $370,348, respectively, was recorded in selling and administrative
expenses.
(*) On May 1, 2019, through its subsidiary Telefonía por Cable, S.A. de C.V. as a buyer, the Group entered into an asset
purchase-sale agreement and assignment of rights with Axtel, S.A.B. de C.V., for intangible assets and fixed assets
of the FTTH (Fiber To The Home) at $1,150,000 plus value added tax where the customer list was purchased for
$266,731 as an intangible asset (see Note 12) and fixed assets for $883,269.
b)
A list of finance leases, net of depreciation reclassified to January 1, 2019 is as follows:
North
West
Pacific
Southeast
TCO
Bajío
Center
Gulf
Metrocarrier
Right-of-use assets
Network and technical equipment for signal distribution, net
Reclassification at January 1, 2019
Total
$
1,323,925
As at December 31, 2020 and 2019
MEGACABLE.
Beginning balance
Additions
Ending balance
$
134,645
134,645
265,569
265,569
429,492
429,492
693,805
693,805
318,640
318,640
1,242,205
1,242,205
1,104,865
1,104,865
86,511
86,511
102,665
102,665
es
$
4,378,397
4,378,397
Due to the increase in the frequency of new cable subscribers in 2020 and 2019, the Group capitalized connection
costs in the network asset for $1,049,020 and $889,077 (materials and labor necessary to physically extend and
connect the Network to the new customer homes), respectively.
The recoverable amount of all Cash Generating Units (CGU) is determined based on value in use calculations. These
calculations use the projections of pretax cash flows based on financial budgets approved by Management that cover a
five-year period. Cash flows that exceed the five-year period are extrapolated using the estimated growth rates mentioned
below. Growth rates do not exceed the long-term average growth rate for the telecommunications business in which the CGU
operates.
The recovery values of each of the CGUS as at December 31, 2020 and 2019 are as follows:
(11) Goodwill-
An analysis of goodwill as at December 31, 2020 and 2019 is as follows:
Balances as at December
31, 2020 and 2019
Net opening balance
Accumulated impairment
Net book value
Goodwill impairment tests:
North
Acotel
$ 2,296,815
TCO
381,098
IMATEL
331,811
IRA
240,378
SIGETEL
54,893
Other
1,073,402
Total
4,378,397
West
Pacific
Southeast
$ 2,296,815
381,098
331,811
240,378
54,893 1,073,402
4,378,397
TCO
Bajío
Center
Gulf
Metrocarrier
Management reviews business performance based on geography and type of business. Geographical areas have been identified
as the states in Mexico where the Group has a presence. In all geographic areas, the Group maintains cable, telephone, and
internet services. Goodwill is analyzed by Management at the geographic area level for the mass (Cable, Telephone, and
Internet) and business (Metrocarrier) markets. A summary of the goodwill allocation for each geographic area is as follows:
As at December 31, 2020 and 2019
2020
2019
$
8,256,051
18,186,356
24,363,197
3,786,492
11,033,666
10,515,700
12,328,603
6,945,119
4,828,351
2,346,677
12,808,836
7,556,697
8,932,200
5,347,628
7,640,187
3,698,643
11,123,821
6,985,090
60
60View entire presentation