Note 7. Goodwill, In-Process Research and Development, and Other Intangible Assets

The fair values of in-process research and development ("IPR&D") and other identified intangible assets acquired in business combinations are capitalized. We utilize the "income method," which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs or "replacement costs", whichever is greater. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each IPR&D project and other identified intangible assets, independently. IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. Other identified intangible assets are amortized over the relevant estimated useful life. The IPR&D assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment and any impairment loss is recognized in our condensed consolidated statements of operations.

Goodwill represents excess consideration in a business combination over the fair value of identifiable net assets acquired. Goodwill is not amortized, but is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. We determine whether goodwill may be impaired by comparing the fair value of the reporting unit (we have determined that we have only one reporting unit for this purpose), calculated as the product of shares outstanding and the share price as of the end of a period, to its carrying value (for this purpose, our total stockholders' equity). No goodwill impairment has been recognized as of March 31, 2016 or 2015.

The following tables summarize the activity related to our goodwill and intangible assets (in thousands):

	Goodwill		IPR&D		Finite-Lived Intangible Assets
Balance at January 1, 2016	$	13,074	$	28,700	$	2,093
Amortization expense		-		-		(53	)
Impairment		-		-		-
Balance at March 31, 2016	$	13,074	$	28,700	$	2,040

	Goodwill		IPR&D		Finite-Lived Intangible Assets
Balance at January 1, 2015	$	7,702	$	28,700	$	-
Amortization expense		-		-		-
Impairment		-		-		-
Balance at March 31, 2015	$	7,702	$	28,700	$	-