IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 a) Goodwill impairment analysis, financial investments in associated and jointly controlled companies, rights of use, property, plant and equipment and intangi- ble assets. Impairment analyses require the determination of the fair value and / or the use value of these assets (or of some CGU). This process requires a high number of judgments, namely the estimation of future cash flows associated with the assets or the respective CGU and the determination of an appropriate discount rate for calculating the present value of said cash flows. In this regard, the Group has, once again, established the requirement to use the maximum possible amount of observ- able market data. It also established mechanisms for monitoring calculations based on the critical challenge of the reasonableness of the assumptions used, their coher- ence and consistency (in similar situations). Information on the most relevant assumptions used in the impairment analysis, as well as the sensitivity of the results obtained in the face of certain changes in as- sumptions, is disclosed in Notes 2.9, 8 and 9. b) Measurement and recognition of deferred taxes Deferred tax assets are recognized only when there are reasonable expectations of sufficient future taxable income to use these deferred tax assets. At the end of each year, a review of the deferred taxes recorded is made, as well as of the unrec- ognized taxes, which are reduced whenever their future use is no longer probable or recorded, provided that, and to the extent that, it becomes probable the generation of taxable profits in the future that allow their recovery. 341