This excerpt taken from the NDAQ 8-K filed Feb 20, 2008.
Calculation of gain on transfer of assets
After determining the fair value of certain exclusive perpetual non-transferable licenses related to our technology and the Nasdaq brand name, or the contributed assets, we concluded that our
total investment was $162 million ($50 million of cash consideration plus $112 million of contributed assets). The contributed assets had zero carrying value on Nasdaqs books and records prior to the transfer. Our investment in DIFX includes an exchange of assets that will be considered monetary assets in accordance with EITF 01-02 Interpretations of APB Opinion No. 29, therefore, we determined that a gain should be recognized for the difference between Nasdaqs carrying value and the fair value of the contributed assets. This gain is reduced by the portion of economic interest retained since we will have a 33.3% equity investment in DIFX.
The pre-tax gain was calculated as follows:
The after-tax gain was calculated as follows:
Amount eliminated in our investment in DIFX:
Total investment in DIFX after elimination of the gain applicable to the assets controlled by us:
Under the equity method of accounting, Nasdaq recognized a loss of $5.0 million for the nine months ended September 30, 2006, $6.7 million for the year ended December 31, 2006 and a loss of $5.5 million for the nine months ended September 30, 2007 on its investment in DIFX. The loss was calculated as 33.3% of DIFXs net loss for the respective periods. DIFX recorded a loss of $20.2 million for the year ended December 31, 2006 and a loss of $16.6 million for the nine months ended September 30, 2007. The loss for the nine months ended September 30, 2006 was based on the December 31, 2006 loss and was pro-rated for nine months. The amortization expense related to identified finite lived intangible assets was immaterial.