Goodwill and other Identifiable Intangible Assets

6 Months Ended

Mar. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

Amortizable identifiable intangible assets were (in thousands):



	March 31, 2012							September 30, 2011
	Gross carrying amount		Accum. amort.			Net		Gross carrying amount		Accum. amort.			Net
Purchased and core technology	$	46,504	$	(42,834	)	$	3,670	$	46,412	$	(41,716	)	$	4,696
License agreements	2,840		(2,646		)	194		2,840		(2,610		)	230
Patents and trademarks	10,665		(8,018		)	2,647		10,341		(7,505		)	2,836
Customer maintenance contracts	700		(700		)	—		700		(674		)	26
Customer relationships	17,474		(11,707		)	5,767		17,437		(10,865		)	6,572
Non-compete agreements	1,040		(1,040		)	—		1,036		(1,036		)	—
Total	$	79,223	$	(66,945	)	$	12,278	$	78,766	$	(64,406	)	$	14,360

Amortization expense was $1.2 million and $1.7 million for the three month periods ended March 31, 2012 and 2011, respectively. Amortization expense was $2.4 million and $3.4 million for the six months ended March 31, 2012 and 2011, respectively. Amortization expense is recorded on our consolidated statement of operations within cost of sales, primarily within amortization of purchased and core technology, and in general and administrative expense. Estimated amortization expense related to identifiable intangible assets for the remainder of fiscal 2012 and the five succeeding fiscal years is (in thousands):



2012 (six months)	$	2,030
2013	3,711
2014	2,847
2015	2,192
2016	708
2017	219

The changes in the carrying amount of goodwill were (in thousands):



	Six months ended March 31,
	2012		2011
Beginning balance, October 1	$	86,012	$	86,210
Foreign currency translation adjustment	102		317
Ending balance, March 31	$	86,114	$	86,527

We will perform our annual goodwill impairment assessment as of June 30, 2012. At the time of the filing of our quarterly report on Form 10-Q, our market capitalization was below the carrying value of our reporting unit. However, including a control premium there continued to be no indication of goodwill impairment. We are undertaking actions which we believe will improve our operating performance. The failure to achieve these improvements could result in further declines in share price and could lead to potential goodwill impairment charges.

At June 30, 2011 our market capitalization, excluding a control premium, exceeded the carrying value of our reporting unit by 28.6%. As a result, there was no indication of goodwill impairment. We have defined the criteria that could result in additional interim goodwill impairment testing. If these criteria are met, we will undertake the analysis to determine whether a goodwill impairment has occurred. An impairment could have a material effect on our consolidated balance sheet and results of operations. The calculation of asset impairment requires us to make assumptions about future cash flows and revenues. These assumptions require significant judgment and actual results may differ from assumed or estimated amounts.

- 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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