Note 10 - Goodwill:

($ amounts in thousands)



	June 30, 2012		December 31, 2011
Kali Laboratories, Inc.	$	63,729	$	63,729
Anchen Acquisition	215,917		219,703
Edict Acquisition	29,905		—
	$	309,551	$	283,432

In 2004, we acquired all of the capital stock of Kali Laboratories, Inc., a generic pharmaceutical research and development company, for approximately $142,800 thousand in cash and warrants to purchase 150,000 shares of our common stock valued at approximately $2,500 thousand. The acquisition resulted in goodwill, which was allocated to Par.

As noted in Note 2, “Anchen Acquisition,” in 2011 we acquired Anchen for $412,753 thousand in aggregate consideration. This goodwill was allocated to Par. During the second quarter of 2012, we collected $3,786 thousand as a result of post-closing adjustments with the former Anchen securityholders and adjusted goodwill associated with the Anchen Acquisition as of June 30, 2012.

As noted in Note 3, “Edict Acquisition,” on February 17, 2012 we acquired Edict, now renamed Par Formulations Private Limited, for $36,600 thousand in aggregate consideration. This goodwill was allocated to Par.

In accordance with FASB ASC 350-20-35-30, goodwill is not being amortized, but is tested at least annually, on or about December 31st or whenever events or changes in business circumstances necessitate an evaluation for impairment using a fair value approach. The goodwill impairment test consists of a two-step process. The first step is to identify a potential impairment and the second step measures the amount of impairment, if any. Goodwill is deemed to be impaired if the carrying amount of a reporting unit exceeds its estimated fair value.

The FASB has issued ASU 2011-8, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This amendment of Codification will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this amendment, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendment includes a number of examples of events and circumstances for an entity to consider in conducting the qualitative assessment. This amendment to the Codification is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.