Company: CSCIF
Filing Date: 2025-04-09
Form Type: 20-F
Source: 0001641172-25-003456
Chunk: 216

Company: COSCIENS Biopharma Inc.
Filing Date: 2025-04-09
Form: 20-F
Item: Item 18
Chunk 216
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 2, 3 and 11 to the financial statements
 
Critical Audit Matter Description
 
The Company reviews property, plant and equipment at the end of each reporting period to determine whether there is any indication of impairment. An impairment indicator was identified for one of the Company’s cash-generating units (“the CGU”), and the Company estimated the recoverable amount for the CGU based on value in use, using a discounted cash flow model. As at December 31, 2024, the recoverable amount exceeded the carrying amount of the CGU.

F-3
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While there are several inputs required to determine the recoverable amount of the CGU, the inputs with the highest degree of subjectivity and estimation uncertainty are the forecasted revenues, forecasted costs and discount rate. The determination of these inputs is impacted by the material weakness identified by management as described in Management’s Annual Report on Internal Control over Financial Reporting. Consequently, auditing these inputs required a high degree of auditor judgement and an increased extent of audit effort, including the involvement of fair value specialists.
 
How the Critical Audit Matter was Addressed in the Audit
 
Our audit procedures related to forecasted revenues, forecasted costs, and the discount rate used to determine the recoverable amount of the CGU included the following, among others:
 

●   Evaluated the reasonableness of management’s forecasted revenues by considering historical results
                                and management’s underlying growth plans.                             
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●   Evaluated the reasonableness of management’s forecasted costs by considering:                     

○                                   Actual results of the CGU;                               
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○   Industry data where applicable; and                                                      
○   Management’s plans corroborated through inquiry with the Company’s operational personnel.

●   With the assistance of fair value specialists, evaluated the reasonableness of the discount rate by testing
                                         the underlying source information.                                    
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Going Concern – Refer to Notes 1 and 3 to the financial statements (also see going concern explanatory paragraph above)
 
Critical Audit Matter Description
 
The financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company had net losses and negative cash flows from operating activities during the year ended December 31, 2024 and an accumulated deficit as of December 31, 2024. These conditions, along with other matters discussed in Note 1 to the financial