Clearwire 2008 Annual Report Download - page 96

f
a
i
rva
l
ue o
f
an
i
ntang
ibl
e asset w
i
t
hi
ts carry
i
ng amount. I
f
t
h
e carry
i
ng amount o
f
an
i
ntang
ibl
e asset excee
d
s
i
ts
f
a
i
rva
l
ue, an
i
mpa
i
rment
l
oss w
ill b
e recogn
i
ze
di
n an amount equa
l
to t
h
at excess. T
h
e
f
a
i
rva
l
ue
i
s
d
eterm
i
ne
db
y
e
stimatin
g
the discounted future cash flows that are directl
y
associated with, and that are expected to arise as a direct
r
esu
l
to
f
t
h
e use an
d
eventua
ldi
spos
i
t
i
on o
f
,t
h
e asset. In accor
d
ance w
i
t
h
SFAS No. 142,
i
ntang
ibl
e assets w
i
t
h
i
n
d
e
fi
n
i
te use
f
u
lli
ves are assesse
df
or
i
mpa
i
rment annua
ll
y, or more
f
requent
l
y,
if
an event
i
n
di
cates t
h
at t
h
e asset
m
i
g
ht be impaired. We had no impairment of our indefinite lived intan
g
ible assets in an
y
of the periods presented.
S
p
ectrum licenses with definite useful lives and favorable s
p
ectrum leases are recorded at fair value at the date
o
f
acqu
i
s
i
t
i
on an
d
are assesse
df
or
i
mpa
i
rment w
h
enever events or c
h
anges
i
nc
i
rcumstances
i
n
di
cate t
h
at t
he
c
arr
yi
n
g
amount o
f
an asset ma
y
not
b
e recovera
bl
e, as requ
i
re
dby
SFAS No. 144. As state
din
P
roperty, P
l
ant an
d
E
q
uipment
,
we determined that we had a tri
gg
erin
g
event in accordance with SFAS No. 144 and concluded that
th
ere was no
i
mpa
i
rment
l
osses
f
or spectrum
li
censes w
i
t
hd
e
fi
n
i
te use
f
u
lli
ves an
df
avora
bl
e spectrum
l
eases
i
nt
he
y
ears ended December 31, 2008 and 2007.
Ot
h
er Intangi
bl
e Asset
s
— Intan
gibl
e assets cons
i
st o
f
su
b
scr
ib
er re
l
at
i
ons
hi
ps, tra
d
emar
k
san
d
patents, an
d
are stated at cost less accumulated amortization, for those intangible assets with definite lives. Amortization i
s
c
a
l
cu
l
ate
d
us
i
n
g
e
i
t
h
er t
h
e stra
igh
t-
li
ne met
h
o
d
or an acce
l
erate
d
met
h
o
d
over t
h
e assets est
i
mate
d
rema
i
n
i
n
g
use
f
u
l
li
ves. T
h
e cost o
fi
ntan
gibl
es acqu
i
re
di
na
b
us
i
ness com
bi
nat
i
on are
f
a
i
rva
l
ue
d
at t
h
e
d
ate o
f
acqu
i
s
i
t
i
on. We
account for our other intan
g
ible assets in accordance with the provisions of SFAS No. 142. In accordance wit
h
S
FAS No. 142,
i
ntang
ibl
e assets w
i
t
hi
n
d
e
fi
n
i
te use
f
u
lli
ves are assesse
df
or
i
mpa
i
rment annua
ll
y, or mor
e
frequentl
y
if an event indicates that the asset mi
g
ht be impaired. We performed our impairment test in the fourt
h
q
uarter of 2008 and 2007 and found no impairment of our indefinite lived intan
g
ible assets
.
B
usiness
C
ombination
s
—
We account for acquisitions occurring before January 1, 2009 using the purchase
m
et
h
o
di
n accor
d
ance w
i
t
h
SFAS No. 141
,
Business Com
b
ination
s
,w
hi
c
h
we re
f
er to as SFAS No. 141. T
h
eC
l
os
i
n
g
of the Transactions at November 28, 2008 was accounted for usin
g
SFAS No. 141. SFAS No. 141 requires that the
t
otal
p
urchase
p
rice be allocated to the assets ac
q
uired and liabilities assumed based on their fair values at th
e
acqu
i
s
i
t
i
on
d
ate. I
f
t
h
e cost o
f
t
h
e acqu
i
s
i
t
i
on
i
s
l
ess t
h
an t
h
e
f
a
i
rva
l
ue o
f
t
h
e net assets acqu
i
re
d
,t
h
e
diff
erence
i
s
allocated to certain lon
g
-term non-financial assets. The allocation process requires an anal
y
sis of acquired fixed
assets, contracts, and contin
g
encies to identif
y
and allocate the excess of fair value over cost of all assets acquired.
Si
gn
ifi
cant management
j
u
d
gment
i
s requ
i
re
di
n est
i
mat
i
ng t
h
e
f
a
i
rva
l
ue o
f
assets acqu
i
re
d
an
dli
a
bili
t
i
es assume
d.
The fair value estimates are based on future expectations and assumptions deemed reasonable b
y
mana
g
ement. Ou
r
allocation of the
p
urchase
p
rice to s
p
ecific assets and liabilities is based u
p
on valuation
p
rocedures and techni
q
ues
us
i
ng
i
ncome, cost an
d
mar
k
et approac
h
es. Purc
h
ase transact
i
ons are su
bj
ect to purc
h
ase pr
i
ce a
ll
ocat
i
on
a
dj
ustments
d
ue to cont
i
n
g
enc
y
reso
l
ut
i
on
f
or up to one
y
ear a
f
ter c
l
ose
.
D
eri
v
ati
v
e Instrument
s
— In the normal course of business, we are ex
p
osed to the effects of interest rate
c
han
g
es. We have limited our exposure b
y
adoptin
g
established risk mana
g
ement policies and procedures
,
i
nc
l
u
di
ng t
h
e use o
fd
er
i
vat
i
ve
i
nstruments. It
i
s our po
li
cy t
h
at
d
er
i
vat
i
ve transact
i
ons are execute
d
on
l
yt
o
m
ana
g
e exposures arisin
g
in the normal course of business and not for the purpose of creatin
g
speculative position
s
or tradin
g
. We account for derivative instruments in accordance with SFAS No. 133
,
Accounting
f
or Derivative
Instruments an
d
He
dg
in
g
Activitie
s
,w
hi
c
h
we re
f
er to as SFAS No. 133. SFAS No. 133, as amen
d
e
d
an
di
nterprete
d
,
e
stablishes accountin
g
and reportin
g
standards for derivative instruments, includin
g
certain derivative instruments
e
mbedded in other contracts, and for hed
g
in
g
activities. As required b
y
SFAS No. 133, we record all derivatives on
th
e
b
a
l
ance s
h
eet at
f
a
i
rva
l
ue as e
i
t
h
er assets or
li
a
bili
t
i
es. T
h
e account
i
ng
f
or c
h
anges
i
nt
h
e
f
a
i
rva
l
ue o
f
d
er
i
vat
i
ves
d
epen
d
sont
h
e
i
nten
d
e
d
use o
f
t
h
e
d
er
i
vat
i
ve an
d
t
h
e resu
l
t
i
n
gd
es
ig
nat
i
on. Eac
hd
er
i
vat
i
ve
i
s
d
es
ig
nate
d
as either a cash flow hed
g
e, a fair value hed
g
e, or remains undesi
g
nated. Derivatives used to hed
g
e the exposure t
o
c
hanges in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interes
t
r
ate r
i
s
k
, are cons
id
ere
df
a
i
rva
l
ue
h
e
dg
es. Der
i
vat
i
ves use
d
to
h
e
dg
et
h
e exposure to var
i
a
bili
t
yi
n expecte
df
utur
e
c
as
hfl
ows, or ot
h
er t
y
pes o
ff
orecaste
d
transact
i
ons, are cons
id
ere
d
cas
hfl
ow
h
e
dg
es. Our
d
er
i
vat
i
ve
i
nstruments
are undesignated, with changes in fair value recognized currently in the consolidated statement of operations.
84
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)