Citrix 2012 Annual Report Download - page 76

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F-10
Property and Equipment
Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, which is generally three years for computer equipment, software, office equipment and furniture, the
lesser of the lease term or five years for leasehold improvements, which is the estimated useful life, seven years for the
Company’s enterprise resource planning system and 40 years for buildings.
During 2012 and 2011, the Company retired $5.3 million and $33.1 million, respectively, in property and equipment that
were no longer in use. At the time of retirement, the remaining net book value of these assets was not material and no material
asset retirement obligations were associated with them.
Property and equipment consist of the following:
December 31,
2012 2011
(In thousands)
Buildings $ 76,202 $ 72,100
Computer equipment 179,199 152,795
Software 271,292 224,750
Equipment and furniture 86,483 64,493
Leasehold improvements 152,808 131,586
765,984 645,724
Less accumulated depreciation and amortization (479,459)(384,179)
Land 16,769 15,884
Total $ 303,294 $ 277,429
Long-Lived Assets
The Company reviews for impairment of long-lived assets and certain identifiable intangible assets to be held and used
whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable.
Determination of recoverability is based on an estimate of undiscounted future cash 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 2012, 2011 and 2010, the Company did not recognize any impairment charges associated with its long-lived
assets. For the year ended December 31, 2012, the Company decided to contribute its CloudStack tradename acquired in
conjunction with its acquisition of Cloud.com to the Apache Software Foundation. As a result, the carrying value of the
CloudStack tradename was written down to zero, resulting in a $5.2 million impairment, which was recorded in Amortization
of other intangible assets in the accompanying consolidated statements of income. During 2011 and 2010, the Company did not
recognize any impairment charges associated with its intangible assets.
Goodwill
The Company accounts for goodwill in accordance with the 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
or indefinite lived intangible assets as a result of the annual impairment tests analyses completed during the fourth quarters of
2012 and 2011, respectively. The authoritative guidance provides entities with an option to perform a qualitative assessment to
determine whether further quantitative impairment testing is necessary. The Company performed the qualitative assessment
when it performed its goodwill impairment test in the fourth quarter of 2012. As a result of the qualitative analysis no further
quantitative impairment test was deemed necessary. In-process R&D acquired in connection with the Company's 2012
acquisitions was not material. See Note 3 for acquisitions and Note 11 for segment information.
CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS