Acer 2009 Annual Report Download - page 49

NT$ NT$
Purchase Price: 8,837,267
Fair value of common shares issued 8,700,751
Fair value of outstanding employee stock options assumed 136,516
The identiable assets acquired and liabilities assumed:
Current assets 2,574,588
Long-term investment 789,753
Property, plant and equipment 1,856,836
Intangible assets – ETEN trademark 450,900
Intangible assets – customer relationship 151,100
Intangible assets – developed technology 1,802,500
Intangible assets – others 88,400
Other assets 485,261
Current liabilities (1,263,892) 6,935,446
Goodwill 1,901,821
The ETEN trademark for the stock trading PDA product has an indenite useful life and, accordingly, is
not subject to amortization. The customer relationship is subject to amortization using the straight-line
method over 7 years. The developed technology is subject to amortization using the straight-line method
over 10 years, the estimated period of its economic benets.
Within the allocation period, the Company made adjustments to increase the fair value of outstanding
employee stock options assumed through the acquisition, which also increased goodwill by NT$2,472.
(b) Pro forma information
The following unaudited pro forma nancial information of 2008 presents the combined results of operations
as if the acquisitions of Gateway Inc., Packard Bell B.V., and E-Ten had occurred as of the beginning of
2008:
NT$
Revenue 550,172,239
Net income from continuing operations before income tax 14,676,395
Net income from continuing operations after income tax 11,521,166
Basic earnings per common share (in dollars) 4.43
(c) Impairment test
For the purpose of impairment testing, goodwill and trademarks and trade names with indenite useful lives
are allocated to the Consolidated Companies’ cash-generating units (CGUs) that are expected to benet from
the synergies of the business combination. The carrying amounts of signicant goodwill and trademarks and
trade names with indenite useful lives and the respective CGUs to which they are allocated as of December
31, 2008 and 2009, were as follows:
December 31, 2008
Acer Pan-America
business group
Packard Bell brand
business group
E-Ten Information
System group
NT$ NT$ NT$
Goodwill 18,768,929 1,699,593 1,901,821
Trademarks
& trade names 4,988,336 2,067,836 450,900
December 31, 2009
ITRO-EMEA ITRO-PA ITRO-AAP ITRO-China ITRO-TWN E-Ten SHBG
NT$ NT$ NT$ NT$ NT$ NT$ NT$
Goodwill 12,061,458 4,698,297 2,511,387 137,919 646,380 221,424 1,682,869
Trademarks
& trade names 3,328,857 2,308,646 1,149,623 45,180 62,867 450,900 -
Each CGU to which the goodwill is allocated represents the lowest level within the Consolidated Companies
at which the goodwill is monitored for internal management purposes. In 2009, the Company reorganized
cash-generating units to which goodwill and trademark and trade names with indefinite useful lives were
allocated, as a result, the Company reallocated the aforementioned intangible assets to the related cash-
generating units. Based on the results of impairment tests conducted by the Company’s management, there
was no evidence of impairment of goodwill and trademarks and trade names as of December 31, 2008
and 2009. The recoverable amount of a CGU is determined based on the value in use, and the related key
assumptions were as follows:
Year 2008:
(i) The assessment used cash ow projections based on historical operating performance, future nancial
budgets approved by management covering a 5-year period.
(ii) Discounted rates used to determine the value in use by each CGUs were as follows:
Acer Pan-America business group Packard Bell brand business group E-Ten Information System group
13.7% 11.8% 18.7%
Year 2009:
(i) The assessment used cash ow projections based on historical operating performance, future nancial
budgets approved by management covering a 5-year period.
(ii) Discounted rates used to determine the value in use by each CGUs were as follows:
ITRO-EMEA ITRO-PA ITRO-AAP ITRO-China ITRO-TWN E-Ten SHBG
12.9% 10.9% 16.9% 20.4% 15.7% 19.7% 16.0%
Acer Incorporated 2009 Annual Report
92.
Acer Incorporated 2009 Annual Report
93. Financial Standing