CHRS » Topics » Goodwill and Other Intangible Assets

These excerpts taken from the CHRS 10-K filed Apr 2, 2008.
Goodwill and Other Intangible Assets
 
We account for goodwill and other intangible assets in accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets.”  We own trademarks, tradenames, Internet domain names, customer lists, customer relationships, and a covenant not to compete that we obtained in connection with our acquisitions of LANE BRYANT and Crosstown Traders.  The values of these intangible assets were determined by an independent appraisal using an after-tax discounted cash flow method, based on the estimated future benefits to be received from the assets.  We allocated the excess of the cost of the acquisitions over the estimated fair value of the identifiable tangible and intangible net assets acquired to goodwill.  In accordance with the provisions of SFAS No. 142, we are not amortizing the goodwill.

The LANE BRYANT and Crosstown Traders trademarks, tradenames, and Internet domain names are well-recognized in their respective markets.  We expect to renew and protect these trademarks, tradenames, and Internet domain names indefinitely.  Therefore, we are not amortizing the appraised value of the trademarks, tradenames, and Internet domain names.  We periodically review the trademarks, tradenames, and Internet domain names for indicators of a limited useful life.  We are amortizing the customer lists, customer relationships, and covenant not to compete on a straight-line basis over their estimated useful lives of four to five years.

During Fiscal 2007 we acquired the PETITE SOPHISTICATE and Casual Corner trademarks, tradenames, and internet domain names from third parties.


CHARMING SHOPPES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED FEBRUARY 2, 2008
(Continued)


In accordance with the provisions of SFAS No. 142, we are required to evaluate goodwill and other indefinite-lived intangible assets for impairment annually or more frequently if there is an indication of possible impairment.  During the fourth quarter of Fiscal 2008 we performed our annual impairment review and determined that the carrying value of our Crosstown Traders goodwill and certain Crosstown Traders trademarks (which are included in our Direct-to-Consumer segment) exceeded the implied or estimated fair values of those assets.  Accordingly, we recognized impairment charges of $86,826,000 related to the Crosstown Traders goodwill and $11,393,000 related to the Crosstown Traders trademarks during Fiscal 2008.  During the fourth quarters of Fiscal 2007 and Fiscal 2006 we conducted annual evaluations of our goodwill and other indefinite-lived intangible assets and determined that there was no impairment of these assets.

In accordance with the provisions of SFAS No. 142, we assigned the values of the goodwill and other indefinite-lived intangible assets recognized in connection with our acquisitions of LANE BRYANT, CATHERINES, and Crosstown Traders to the respective reporting units within our reportable business segments.  The calculation of the estimated fair value of our reporting units for the purpose of evaluating goodwill for impairment and the fair values of other intangible assets required estimates, assumptions, and judgments.  The results of our evaluations might have been materially different if different estimates, assumptions, and judgments had been used.  Information on goodwill by business segment is included in
Goodwill and Other Intangible
Assets

 

We
account for goodwill and other intangible assets in accordance with the
provisions of SFAS No. 142, “Goodwill and Other Intangible
Assets.”
  We own trademarks, tradenames, Internet domain names,
customer lists, customer relationships, and a covenant not to compete that we
obtained in connection with our acquisitions of LANE BRYANT and Crosstown
Traders.  The values of these intangible assets were determined by an
independent appraisal using an after-tax discounted cash flow method, based on
the estimated future benefits to be received from the assets.  We
allocated the excess of the cost of the acquisitions over the estimated fair
value of the identifiable tangible and intangible net assets acquired to
goodwill.  In accordance with the provisions of SFAS No. 142, we are
not amortizing the goodwill.



The LANE
BRYANT and Crosstown Traders trademarks, tradenames, and Internet domain names
are well-recognized in their respective markets.  We expect to renew
and protect these trademarks, tradenames, and Internet domain names
indefinitely.  Therefore, we are not amortizing the appraised value of
the trademarks, tradenames, and Internet domain names.  We
periodically review the trademarks, tradenames, and Internet domain names for
indicators of a limited useful life.  We are amortizing the customer
lists, customer relationships, and covenant not to compete on a straight-line
basis over their estimated useful lives of four to five years.



During
Fiscal 2007 we acquired the PETITE SOPHISTICATE and Casual Corner trademarks,
tradenames, and internet domain names from third parties.




CHARMING SHOPPES, INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

YEAR ENDED FEBRUARY 2,
2008

(Continued)





In
accordance with the provisions of SFAS No. 142, we are required to evaluate
goodwill and other indefinite-lived intangible assets for impairment annually or
more frequently if there is an indication of possible
impairment.  During the fourth quarter of Fiscal 2008 we performed our
annual impairment review and determined that the carrying value of our Crosstown
Traders goodwill and certain Crosstown Traders trademarks (which are included in
our Direct-to-Consumer segment) exceeded the implied or estimated fair values of
those assets.  Accordingly, we recognized impairment charges of
$86,826,000 related to the Crosstown Traders goodwill and $11,393,000 related to
the Crosstown Traders trademarks during Fiscal 2008.  During the
fourth quarters of Fiscal 2007 and Fiscal 2006 we conducted annual evaluations
of our goodwill and other indefinite-lived intangible assets and determined that
there was no impairment of these assets.



In
accordance with the provisions of SFAS No. 142, we assigned the values of the
goodwill and other indefinite-lived intangible assets recognized in connection
with our acquisitions of LANE BRYANT, CATHERINES, and Crosstown Traders to the
respective reporting units within our reportable business
segments.  The calculation of the estimated fair value of our
reporting units for the purpose of evaluating goodwill for impairment and the
fair values of other intangible assets required estimates, assumptions, and
judgments.  The results of our evaluations might have been materially
different if different estimates, assumptions, and judgments had been
used.  Information on goodwill by business segment is included in

EXCERPTS ON THIS PAGE:

10-K (2 sections)
Apr 2, 2008
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