Note 11 - Intangible Assets, Net

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

11. Intangible assets, net

	As of December 31,
	2017			2016
	US$(’000)			US$(’000)
Intangible assets not subject to amortization:
Domain name		1,478			1,393
Intangible assets subject to amortization:
Customer relationship		2,038			1,920
Non-compete agreements		1,122			1,057
Software technologies		314			295
Cloud compute software technology		1,420			1,338
Internet safety, information exchange security and data encryption software		1,990			1,874
Intelligent marketing data service platform		4,942			4,655
Cloud video management system		1,454			1,369
Other computer software		120			113
Intangible assets, cost		14,878			14,014
Less: accumulated amortization		(6,443	)		(4,875	)
Less: accumulated impairment losses		(4,627	)		(1,875	)
Intangible assets, net		3,808			7,264

Amortization expenses in aggregate for the years ended

December 31, 2017

and

2016

were approximately

US$1,226,000

and

US$1,324,000,

respectively.

The Company performed an impairment analysis on its intangible assets as of

December 31, 2017

and

2016,

respectively. The fair value of intangible assets was determined using Multi-period Excess Earning Method (the “MPEEM method”) and Replacement Cost Method. As an application of income approach, the MPEEM method is a widely-used valuation method, it determines the fair value of the asset as the present value of the cash flows attributable to it. As the asset will generally earn cash flows through interaction with other tangible and intangible assets, the contributions to cash flows of those other assets must be removed. Those assets are referred to as contributory assets which are defined as all assets that are utilized in the realization of expected future cash flows for the target asset (See Note

3

(n) for significant unobservable internally-developed inputs used in the intangible assets fair value measurement).

For the year ended

December 31, 2017,

the Company provided approximately

US$2.55

million impairment losses associated with intelligent marketing data service platform, cloud video management system and cloud compute software technology of its internet advertising and data service business segment, due to insufficient estimated future cash flows expected to be generated by these assets. For the year ended

December 31, 2016,

the Company did

not

recognize any impairment loss associated with its intangible assets.

Based on the net carrying value of the finite-lived intangible assets recorded, which weighted average remaining useful life was

6.38

years as of

December 31, 2017,

and assuming

no

further subsequent impairment of the underlying intangible assets, the estimated future amortization expenses is approximately

US$

656,000

each year for the year ending

December 31, 2018,

2019

and

2020,

approximately

US$646,000

for the year ending

December 31, 2021,

and approximately

US$497,000

for the year ending

December 31, 2022.