Critical Accounting Estimates and Judgements (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Sensitivity Analysis Based on 10% Increase/Decrease in Assumptions of Gross Margin, Discount Rate, Terminal Growth Rate (Details)

At December 31, 2017, and 2018 the Group has performed a sensitivity analysis increasing or decreasing the assumptions of gross margin, discount rate, and revenue and terminal growth rate by a 10%, with all the other variables held constant, as follows:


	Difference between recoverable amount and carrying amounts
	2017					2018
Goodwill
Gross margin		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		81.31	%	143.63	%		0.51	%	41.12	%
Electromechanical		197.30	%	620.85	%		(9.73	%)	38.89	%
IT equipment and services		0.32	%	38.87	%		42.60	%	101.27	%
Telecommunication services		465.17	%	1339.26	%		—		—

Discount rate:		(10	%)	10	%		(10	%)	10.00	%
Engineering and construction		146.07	%	86.86	%		39.19	%	6.65	%
Electromechanical		478.08	%	354.39	%		29.36	%	2.97	%
IT equipment and services		30.06	%	11.25	%		77.06	%	48.93	%
Telecommunication services		2190.66	%	1967.37	%		—		—

Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		107.41	%	117.91	%		18.48	%	23.30	%
Electromechanical		402.19	%	416.25	%		12.90	%	16.34	%
IT equipment and services		18.54	%	20.52	%		59.73	%	62.91	%
Telecommunication services		2232.86	%	2394.81	%		—		—


	Difference between recoverable amount and carrying amounts
	2017					2018
Trademarks
Revenue growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		16.37	%	(4.79	%)		75.00	%	116.27	%
Vial y Vives - DSD		(40.72	%)	(63.32	%)		27.40	%	55.71	%
Adexus		22.10	%	(0.10	%)		21.40	%	48.38	%

Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		(7.21	%)	22.92	%		126.00	%	72.33	%
Vial y Vives - DSD		(58.56	%)	(45.65	%)		29.54	%	55.99	%
Adexus		(2.13	%)	28.02	%		56.26	%	18.49	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%

Morelco		8.61	%	3.17	%		91.70	%	99.82	%
Vial y Vives - DSD		(51.36	%)	(54.47	%)		38.99	%	44.26	%
Adexus		13.27	%	8.86	%		31.90	%	48.38	%

Summary of Sensitivity Analysis Performed Considering a 10% Increase/Decrease in Group's Gross Margins

As of December 31, 2016, 2017 and 2018, a sensitivity analysis was performed considering a 10% increase/decrease in the Group’s gross margins, as follows:


	2016			2017			2018
Revenues		2,713,013			2,214,108			1,961,100
Gross profit		29,310			106,902			32,685
%		1.08			4.83			1.67
Plus 10%		1.19			5.31			1.84

Increase in profit before income tax		2,975			10,667			3,399

		32,285			117,569			36,084

Less 10%		0.97			4.35			1.50

Decrease in profit before income tax		(2,975	)		(10,667	)		(3,399	)

		26,335			96,235			29,286

Disclosure of Adjustments of Financial Statements

as a result, the following adjustments were included in the financial statements of our subsidiary GyM S.A., resulting in a loss of S/15.2 million:


	S/000
Income for debt forgiveness (i)		431,484
Indemnification income		33,600
Work in progress impairment (ii)		(410,199	)
Other provisions		(24,915	)
Inventories impairment (iii)		(33,824	)
Financial expenses		(7,004	)
Property, plant and equipment impairment		(4,143	)
Others (liability) asset, net		(164	)

		(15,165	)

(i)	The extinguished trade accounts payable relates to the recognition of the project estimated margin recorded as a liability (Note 2.17).

(ii)	The recoverable of work in progress relates to the minimum secured payment to be obtained from GSP.

(iii)

Inventories are assets specific in nature and cannot be traded in an active market.