Note 4 - Goodwill and Purchased Intangible Assets

12 Months Ended

Dec. 26, 2015

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Purchased Intangible Assets

Changes in the carrying value of goodwill by during the years ended December 26, 2015 and December 27, 2014 were as follows

(

in thousands

)

	Total Goodwill
Balance, December 28, 2013	$	67,983
Impact of currency exchange		(4,851	)
Balance, December 27, 2014		63,132
Impact of currency exchange		(2,868	)
Balance, December 26, 2015	$	60,264

COHU, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Purchased intangible assets, subject to amortization, are as follows

(in thousands)

	December 26, 2015						December 27, 2014
					Remaining
	Gross Carrying		Accumulated		Useful Life		Gross Carrying		Accumulated
	Amount		Amortization		(years)		Amount		Amortization
Rasco technology	$	26,904	$	23,776		0.9	$	29,845	$	22,616
Ismeca technology		27,043		10,329		5.0		27,014		6,879
Trade names		5,547		92		14.7		5,723		-
	$	59,494	$	34,197			$	62,582	$	29,495

Changes in the carrying values of purchased intangible assets presented above are a result of the impact of fluctuation in currency exchange rates.

We review the assessment of indefinite life for our trade names each period to determine whether the indefinite life assumption continues to be supportable. If it is deemed unsupportable the change in useful life from indefinite to finite is made and amortization is recognized on a prospective basis after testing the assets for impairment. On September 24, 2015, we introduced a rebranding initiative and unveiled a new “Cohu” logo. The primary goal of the change was to improve the cohesiveness of our organization and come to the market as one brand. Previously, it had been our determination that the Rasco and Ismeca trade names had an indefinite life. As a result of the rebranding initiative, we determined that the classification of the useful life of our trade names as indefinite was no longer appropriate based on our expectations of the future period over which the assets will provide economic benefit to Cohu. After performing a test for impairment, we determined that the assets should be amortized over fifteen years.

Amortization expense related to purchased intangible assets was approximately $7.0 million in 2015 and $7.8 million in both 2014 and 2013. As of December 26, 2015, we expect amortization expense in future periods to be as follows: 2016 - $6.8 million; 2017 - $3.7 million; 2018 - $3.7 million; 2019 - $3.7 million 2020 - $3.7 million; and thereafter $3.7 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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