Assets Held for Sale
|12 Months Ended|
Dec. 31, 2022
|Discontinued Operations and Disposal Groups [Abstract]|
|Assets Held for Sale||
5. Assets Held for Sale
2022 Disposal groups held for sale
During the fourth quarter of 2022, the Group identified two disposal groups that meet the requirements of ASC 360-10 and were classified as held for sale in its Consolidated Balance Sheets. This current period classification resulted in the Group identifying a triggering event as it was more likely than not that these asset groups would be disposed of under ASC 350-20. For more details over the resulting impairment tests performed prior to measuring the disposal groups at the lower of their carrying amount or fair value less cost to sell, see Note 10.
In October 2022, the Group announced its plan to sell the IPA Business, a reporting unit previously within the Healthcare services segment. Management made certain judgements when assessing if this sale qualified for the presentation and disclosure requirements of a discontinued operation as defined under ASC 205, Presentation of Financial Statements, and concluded that the sale is not a strategic shift and therefore is not considered a discontinued operation. The Group intends to sell the IPA Business within the second quarter of 2023. Accordingly, the assets and liabilities of the IPA Business are classified within the current section of the Consolidated Balance Sheet as of December 31, 2022 only. Further, the following presents the major classes of assets and liabilities for the IPA Business reporting unit held for sale as of December 31, 2022:
The IPA Business had the following pre-tax losses for each year ended December 31:
In addition to the IPA Business reporting unit, the Group separately determined that the Higi reporting unit met the criteria for being classified as held for sale as of December 31, 2022. The Group intends to sell Higi within one year from December 31, 2022. Accordingly, the assets and liabilities of Higi are classified within the current section of the Consolidated Balance Sheet as of December 31, 2022 only. In addition to the impairment charges recognized as a result of the Group’s interim and year end impairment tests described in Note 10, an additional impairment charge of 14.3 million was recognized for long-lived assets impairment under ASC 360-10, as a result of its held for sale classification and estimated and accrued cost to sell the Higi reporting unit.
On January 14, 2021, the Group entered into a Share Purchase Agreement (“SPA”) with TELUS Corporation (“TELUS”), a Canadian publicly traded holding company which is the parent of various telecommunication subsidiaries, for the sale of the Babylon Health Canada Limited business. The entire issued share capital of Babylon Health Canada Limited was transferred to TELUS for a base price of $1.8 million in Canadian dollars (“CAD”), which has been adjusted for working capital and net indebtedness. An additional $3.5 million CAD payment was made by TELUS that was attributable to a partial repayment of an Intercompany Loan due from Babylon Canada to Babylon Partners Limited. The remaining amount of the Intercompany loan was forgiven immediately prior to the execution of the SPA.
Effect of disposal:
The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef