2020 Annual Report

2020 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS MEGACABLE. The book value of the components replaced is derecognized. Maintenance and repair expenses related to daily property, networks and equipment services are recognized in the consolidated statement of comprehensive income at the time they are incurred. Land is not depreciated. Depreciation of the remaining properties, networks and equipment is systematically determined on the value of the assets, on a straight-line basis, which is applied to the cost of the assets without including their residual value and considering their useful lives expected by Management, which are as follows: Leasehold improvements are depreciated over the term of the respective operating lease agreements. The residual values and useful lives of the assets are reviewed and adjusted, if necessary, on the closing date of each year. The value of property, networks and equipment is reviewed when there are indicators of impairment in the value of said assets. When the recovery value, which is the higher between the sale price and its use value (which is the present value of future cash flows) is less than the net book value, the difference is recognized as an impairment loss. For the years ended December 31, 2020 and 2019, there were no indicators of impairment. See Note 20). Asset Description Depreciation Depreciation rate rate 2020 2019 Estimated useful life 2020 Estimated useful life 2019 (n) Goodwill and intangible assets- a) Goodwill Goodwill arises from the acquisition of subsidiaries and represents the consideration transferred in excess of the Group's interest in the net fair value of the acquired entity's net identifiable assets, liabilities and contingent liabilities of the acquired entity and the fair value of the non-controlling interest in the acquired entity. Goodwill on acquisitions of subsidiaries is included in intangible assets and is recognized at cost deducting accumulated impairment losses, which are not reversed. For impairment testing purposes, goodwill acquired in a business combination is allocated to each Cash Generating Unit (CGU) or groups of cash generating units, which are expected to benefit from the synergies of the combination. Each unit or group of units to which goodwill has been assigned represents the lowest level within the entity to which goodwill is controlled for internal management purposes. Goodwill is controlled at the operating segment level. Goodwill impairment reviews are carried out annually or more frequently if events or changes in circumstances indicate possible impairment. The book value of goodwill is compared to the recoverable amount, which is the highest value between the value in use and the fair value less costs of sale. Any impairment is recognized immediately as an expense and is not subsequently reversed. As at December 31, 2020 and 2019, no impairment losses were recognized in goodwill. See Note 11. Land Buildings N/A N/A 2.5% 2.5% 40 40 Network and technical equipment for signal distribution Networks Converters Equipment 6.64% 10.00% 6.65% 6.64% 15 10.00% 6.65% 10 15 Cable modems 10.00% 10.00% Laboratory equipment 7.11% 7.11% 14 5050± 15 10 15 10 10 14 Furniture and office equipment 5.67% 5.67% 18 18 Computer equipment 12.50% 12.50% 8 8 Transportation equipment 11.11% 11.11% 6 6 Leasehold improvements 5.67% 5.67% 18 18 b) Customer bases Telecommunications equipment 5.67% 5.67% 18 18 Other Tools and equipment 8.33% 8.33% 12 12 12 Intangible assets acquired during 2019 that were not in a business combination were recorded at acquisition cost. Intangible assets acquired in a business combination are valued at their fair value at the date of purchase. The main intangible assets recognized by the acquisitions is the subscriber portfolio, which according to the study carried out has a useful life of approximately four years. They are amortized on a straight-line basis. See Note 12. b) Trademarks and patents Trademarks and patents acquired individually are recognized at historical cost. Trademarks and patents acquired through business combinations are recognized at their fair value at the date of acquisition. Trademarks and patents have a defined 42

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