Acer 2009 Annual Report Download - page 48

Goodwill Patents
Trademarks
and trade
names
Customer
Relationships Others Total
NT$ NT$ NT$ NT$ NT$ NT$
Amortization - (122,344) (32,805) (156,552) (137,346) (449,047)
Balance at December 31, 2008 22,574,040 692,838 8,067,556 1,517,349 1,894,982 34,746,765
Additions - 369,000 - - 2,536,507 2,905,507
Adjustments made subsequent to
business acquisition (138,067) - - - - (138,067)
Disposals (9,624) (39,275) - - (9,759) (58,658)
Reclassication - - - - 16,867 16,867
Effect of exchange rate changes (448,895) (3,073) (161,298) (28,110) (6,842) (648,218)
Amortization - (217,701) (43,793) (178,933) (939,701) (1,380,128)
Balance at December 31, 2009 21,977,454 801,789 7,862,465 1,310,306 3,492,054 35,444,068
(a) Acquisitions
(i) Gateway, Inc.
On October 15, 2007, the Company completed the acquisition of 100% equity ownership of Gateway,
Inc., a personal computer company in the U.S., through its indirectly wholly owned subsidiary Acer
American Holding, at a price of US$1.90 (dollars) per share. The total purchase price amounted to
US$711,420, which was inclusive of direct transaction costs.
The acquisition was accounted for in accordance with ROC SFAS No. 25 “Accounting for Business
Combinations”, under which, the excess of the purchase price and direct transaction costs over the fair
value of the net identiable assets was recognized as goodwill.
The following represents the allocation of the purchase price to the assets acquired, liabilities assumed,
and goodwill at the date of acquisition:
NT$ NT$
Purchase Price 23,507,016
The identiable assets acquired and liabilities assumed:
Current assets 32,139,646
Investments carried at cost 277,057
Property, plant and equipment 2,808,517
Intangible assets ‒ trademarks of Gateway and eMachines 5,504,220
Intangible assets ‒ customer relationships 1,551,042
Intangible assets ‒ others 1,687,210
Other assets 58,355
Current liabilities (24,576,616)
Long-term liabilities (9,673,377)
Other liabilities (2,923,302) 6,852,752
Goodwill 16,654,264
Within one year from the acquisition date (the “allocation period”), the Company identied adjustments,
after the initial recognition, to certain property and equipment and pre-acquisition contingent liabilities.
These adjustments decreased property, plant and equipment by NT$77,564 and increased current
liabilities by NT$1,766,474, which also increased goodwill by NT$1,844,038.
The Gateway trademark has an indefinite useful life and, accordingly, is not subject to amortization.
The eMachines trademark is being amortized using the straight-line method over 20 years, the estimated
period of its economic benefits. Customer relationships are being amortized using the straight-line
method over the estimated useful life of 10 years.
(ii) Packard Bell B.V.
In March and June of 2008, the Company completed the acquisition of 100% equity ownership of
Packard Bell B.V., a personal computer company in Europe, through its indirectly wholly owned
subsidiary Acer Europe B.V., at a total purchase price of Euro 66,117, which was inclusive of direct
transaction costs.
The acquisition was accounted for in accordance with ROC SFAS No. 25 “Accounting for Business
Combinations”, under which, the excess of the purchase price and direct transaction costs over the fair
value of the net identiable assets was recognized as goodwill.
The following represents the allocation of the purchase price to the assets acquired, liabilities assumed,
and goodwill at the date of acquisition:
NT$ NT$
Purchase Price 3,172,080
The identiable assets acquired and liabilities assumed:
Current assets 9,587,790
Property, plant and equipment 351,162
Intangible assets – Packard Bell trademark 2,163,744
Current liabilities (10,665,179)
Other liabilities (39,608) 1,397,908
Goodwill 1,774,172
The Packard Bell trademark has an indenite useful life and, accordingly, is not subject to amortization.
Within the allocation period, the Company made adjustments to decrease deferred charges by NT$33,768
and to decrease current liabilities by NT$174,307, which also decreased goodwill by NT$140,539.
(iii) E-Ten Information Systems Co., Ltd
On September 1, 2008, the Company completed its acquisition of 100% equity ownership of E-TEN, a
handheld device company in Taiwan. The Company offered to exchange one share of its stock for every
1.07 shares of outstanding E-Ten stock, and issued a total of 168,158,878 common shares. E-Ten then
became the Company’s direct wholly owned subsidiary.
The acquisition was accounted for in accordance with ROC SFAS No. 25 “Accounting for Business
Combinations”, under which, the excess of the purchase price and direct transaction costs over the fair
value of the net identiable assets was recognized as goodwill.
The following represents the allocation of the purchase price to the assets acquired, liabilities assumed,
and goodwill at the date of acquisition:
Acer Incorporated 2009 Annual Report
90.
Acer Incorporated 2009 Annual Report
91. Financial Standing