Citrix 2009 Annual Report Download - page 91

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss is based
on the fair value of the asset compared to its carrying value. Long-lived assets and certain identifiable intangible
assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
During 2009 the Company recognized impairment charges associated with its long-lived assets of $4.2
million primarily related to information systems. During 2008 and 2007, the Company did not recognize any
impairment charges associated with its long-lived or intangible assets.
Goodwill
The Company accounts for goodwill in accordance with FASB’s authoritative guidance which requires that
goodwill and certain intangible assets are not amortized, but are subject to an annual impairment test. There was
no impairment of goodwill as a result of the annual impairment tests completed during the fourth quarters of
2009 and 2008. Historically, the Company completed the annual goodwill impairment test as of December 31 of
each fiscal year. During fiscal 2009, the Company changed the annual impairment test date from December 31 to
October 1. This change was made to allow for more time and better support in the completion of the assessment
prior to the Company’s filing of its Annual Report on Form 10-K as a large accelerated filer. In addition, the
earlier date would allow the Company the additional time necessary to complete any Step 2 impairment analysis
should one be required in the future prior to the filing of its Annual Report on Form 10-K. The Company believes
the resulting change in accounting principle related to changing the annual impairment testing date will not
delay, accelerate, or avoid an impairment charge. The Company has determined that this change in accounting
principle is preferable under the circumstances. A letter of preferability from the Company’s independent
registered public accounting firm regarding this change in accounting principle is included as an exhibit to this
Annual Report on Form 10-K for the year ended December 31, 2009. Excluding goodwill, the Company has no
intangible assets deemed to have indefinite lives. See Note 3 for acquisitions and Note 12 for segment
information.
The following table presents the change in goodwill allocated to the Company’s reportable segments during
2009 and 2008 (in thousands):
Balance at
January 1,
2009 Additions Other
Balance at
December 31,
2009
Balance at
January 1,
2008 Additions Other
Balance at
December 31,
2008
Americas(1) .........$648,124 $1,900 $(6,234)(4) $643,790 $652,107 $ 1,624 $(5,607)(3) $648,124
EMEA(2) ........... 62,000 — — 62,000 62,000 — — 62,000
Asia-Pacific ........ 11,000 — — 11,000 11,000 — — 11,000
Online Services
division .......... 183,380 1,438 (1,789) 183,029 163,409 19,971 — 183,380
Consolidated ........$904,504 $3,338 $(8,023) $899,819 $888,516 $21,595 $(5,607) $904,504
(1) The Americas segment is comprised of the United States, Canada and Latin America.
(2) Defined as Europe, Middle East and Africa.
(3) Amount primarily consists of adjustments made to deferred taxes related to the acquisition of XenSource.
(4) Amount primarily consists of adjustment made by the Company after it determined that it had incorrectly
recorded acquisition-related payments to certain employees in connection with the October 2007 acquisition
of XenSource, Inc. as purchase consideration and goodwill when it should have been recorded as
compensation expense. Accordingly, the Company recorded $5.4 million of compensation expense in 2009
related to this item with a corresponding decrease to goodwill.
F-11