This excerpt taken from the AFFX 10-Q filed Nov 7, 2008.
NOTE 6 GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill balance is presented below (in thousands):
During 2008, the Company recorded additional goodwill totaling approximately $68.0 million, of which approximately $51.7 million pertained to the acquisition of USB in the first quarter of fiscal 2008 and approximately $16.2 million pertained to the acquisition of True Materials, Inc. during the third quarter of fiscal year 2008. As of September 30, 2008, the Companys goodwill totaled approximately $193.0 million, or 16% of total assets, and its other intangible assets, consisting of net acquired technology rights totaled approximately $54.9 million, or 5% of its total assets (see Note 8).
SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142) requires that goodwill be assessed for impairment at least annually or whenever changes in circumstances indicate that the carrying amount may not be recoverable from estimated future cash flows. Factors that may be considered a change in circumstance indicating the carrying value of our intangible assets, including goodwill, may not be recoverable include, but are not limited to, significant underperformance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization, and negative industry or economic trends. Additionally, the Company periodically evaluates the recoverability and the amortization period of its acquired technology rights.
The Company performed its required annual impairment test in June 2008 and determined that goodwill was not impaired. During the third quarter of 2008, the Companys stock price fell below the Companys net book value per share. The stock price decline, along with other conditions in the Companys business, are defined as indicators of impairment of goodwill and other intangibles under SFAS 142. Accordingly, the Company was required to assess whether or not an impairment of its intangible assets, including goodwill, had occurred. The Company performed an impairment test using a market based approach as of September 30, 2008 and determined that there was no impairment.
The continued decline of the Companys stock price subsequent to September 30, 2008 and the resulting book value per share being in excess of market value per share, along with other conditions in its business, are indicators that it is more likely than not that the fair value of the Company is less than the carrying value. Therefore, in the fourth quarter of 2008, the Company will assess whether or not an impairment of its goodwill and other intangible assets has occurred and will be conducting an evaluation of the fair market value of these assets. If the implied fair values of goodwill and other intangible assets are less than the carrying amounts, impairment losses will be recognized for the differences.
This excerpt taken from the AFFX 10-K filed Mar 9, 2006.
Goodwill and Other Intangible Assets, the $41.9 million was recorded as an intangible asset. Consistent with the guidance in SFAS 142 and with Statement of Financial Accounting Standard 141 (SFAS 141),