Goodwill And Intangibles

12 Months Ended

Dec. 31, 2011

Note 3—Goodwill and Intangibles

The Company reviews goodwill for impairment annually according to the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company makes a qualitative evaluation about the likelihood of goodwill impairment and if it concludes that it is more than likely than not that the carrying amount of a reporting unit is greater than its fair value, then it will be required to perform the first step of the two-step quantitative impairment test. Otherwise, performing the two-step impairment test is unnecessary. The first step consists of estimating the fair value and comparing the estimated fair value with the carrying value of the reporting unit. If the fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an implied fair value of goodwill. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit's assets and liabilities from its estimated total fair value, which was calculated in step one. An impairment charge would represent the excess of the carrying amount of the reporting unit's goodwill over the implied fair value of the goodwill. The guidance requires goodwill to be tested annually at the same time every year or when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company selected December 31 as its annual testing date. As a result of the Company's annual assessments as of December 31, 2011, 2010, and 2009, no impairment was indicated.

The change in the carrying amount of goodwill during 2010 and 2011 was as follows (in thousands):


Balance at December 31, 2009	$	22,799
Foreign currency translation adjustments		2,157

Balance at December 31, 2010		24,956
Foreign currency translation adjustments		(69	)

Balance at December 31, 2011	$	24,887

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. If the Company determines that the carrying value of the asset is not recoverable, a permanent impairment charge is recorded for the amount by which the carrying value of the intangible asset exceeds its fair value.

The composition of intangible assets subject to amortization at December 31, 2011 and 2010 was as follows (in thousands):


	Useful Life		Gross Carrying Value		Accumulated Amortization			Cumulative Foreign Currency Adjustment		Net Carrying Value
As of December 31, 2011:
Patents		13 years	$	2,476	$	(1,699	)	$	—	$	777
Developed core technology		10 years		1,100		(1,325	)		304		79
Patent license agreement		5 years		741		(494	)		8		255

			$	4,317	$	(3,518	)	$	312	$	1,111

As of December 31, 2010:
Patents		13 years	$	2,476	$	(1,496	)	$	—	$	980
Developed core technology		10 years		1,100		(1,160	)		312		252
Patent license agreement		5 years		741		(341	)		19		419

			$	4,317	$	(2,997	)	$	331	$	1,651

Amortization expense for intangible assets was $559,000, $535,000 and $643,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The estimated amortization for each of the next five years ended December 31 is as follows (in thousands):


Fiscal Years
2012	$	451
2013		290
2014		203
2015		167

	$	1,111

Actual amortization expense to be reported in future periods could differ from these estimates as a result of intangible asset acquisitions, foreign currency translation adjustments, impairments and other factors.

- 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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