Clearwire 2009 Annual Report Download - page 96

I
nterna
ll
y Deve
l
ope
d
Softwar
e
— We cap
i
ta
li
ze costs re
l
ate
d
to computer so
f
tware
d
eve
l
ope
d
or o
b
ta
i
ne
df
or
i
nterna
l
use. So
f
tware o
b
ta
i
ne
df
or
i
nterna
l
use
h
as genera
ll
y
b
een enterpr
i
se-
l
eve
lb
us
i
ness an
dfi
nance so
f
tware
c
ustomized to meet s
p
ecific o
p
erational needs. Costs incurred in the a
pp
lication develo
p
ment
p
hase are ca
p
italized
an
d
amort
i
ze
d
over t
h
e use
f
u
l lif
eo
f
t
h
eso
f
tware, w
hi
c
hi
s genera
ll
yt
h
ree years. Costs recogn
i
ze
di
nt
h
e
p
re
li
m
i
nary pro
j
ect p
h
ase an
d
t
h
e post-
i
mp
l
ementat
i
on p
h
ase, as we
ll
as ma
i
ntenance an
d
tra
i
n
i
ng costs, are
e
x
p
ensed as incurred.
Sp
ectrum Licenses
—
Spectrum
li
censes pr
i
mar
il
y
i
nc
l
u
d
e owne
d
spectrum
li
censes w
i
t
hi
n
d
e
fi
n
i
te
li
ves,
owne
d
s
p
ectrum
li
censes w
i
t
hd
e
fi
n
i
te
li
ves, an
df
avora
bl
es
p
ectrum
l
eases. In
d
e
fi
n
i
te
li
ve
d
s
p
ectrum
li
censes
ac
q
uired are stated at cost and are not amortized. While owned s
p
ectrum licenses in the United States are issued for
a fixed time, renewals of these licenses have occurred routinely and at nominal cost. Moreover, we have determined
t
h
at t
h
ere are current
ly
no
l
e
g
a
l
,re
g
u
l
ator
y
, contractua
l
, compet
i
t
i
ve, econom
i
corot
h
er
f
actors t
h
at
li
m
i
tt
h
e use
f
u
l
lives of our owned spectrum licenses and therefore, the licenses are accounted for as intan
g
ible assets wit
h
i
ndefinite lives. The impairment test for intangible assets with indefinite useful lives consists of a comparison of the
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
fair value, an impairment loss will be reco
g
nized in an amount equal to that excess. The fair value is determined b
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. Spectrum
li
censes w
i
t
hi
n
d
e
fi
n
i
te use
f
u
lli
ves are assesse
df
o
r
i
mpairment annuall
y
, or more frequentl
y
, if an event indicates that the asset mi
g
ht be impaired. We had n
o
i
mpairment of our indefinite lived intan
g
ible assets in an
y
of the periods presented
.
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 are state
d
at cost, net o
f
accu-
m
u
l
ate
d
amort
i
zat
i
on, an
d
are assesse
df
or
i
mpa
i
rment w
h
enever events or c
h
an
g
es
i
nc
i
rcumstances
i
n
di
cate t
h
a
t
the carrying amount of an asset may not be recoverable. The carrying value of the definite lived licenses and
s
pectrum
l
eases are amort
i
ze
d
on a stra
i
g
h
t-
li
ne
b
as
i
s over t
h
e
i
r est
i
mate
d
use
f
u
lli
ves or
l
ease term,
i
nc
l
u
di
ng
e
xpecte
d
renewa
l
per
i
o
d
s, as app
li
ca
bl
e. T
h
ere were no
i
mpa
i
rment
l
osses
f
or spectrum
li
censes w
i
t
hd
e
fi
n
i
te use
f
u
l
lives and favorable spectrum leases in the
y
ears ended December 31, 2009, 2008 and 2007
.
Ot
h
er Intangi
bl
e Assets
—
Ot
h
er
i
ntang
ibl
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,
and are stated at cost net of accumulated amortization, for those other intan
g
ible assets with definite lives
.
A
mortization is calculated usin
g
either the strai
g
ht-line method or an accelerated method over the assets’ estimated
r
ema
i
n
i
ng use
f
u
lli
ves. Ot
h
er
i
ntang
ibl
e assets are assesse
df
or
i
mpa
i
rment w
h
enever events or c
h
anges
i
n
c
ircumstances indicate that the carr
y
in
g
amount of the asset ma
y
not be recoverable. There were no impairment
losses for our other intangible assets in the years ended December 31, 2009, 2008 and 2007
.
D
erivative Instruments an
d
He
d
ging Activities
—
In t
h
e norma
l
course o
fb
us
i
ness, we ma
yb
e expose
d
to t
he
eff
ects o
fi
nterest rate c
h
an
g
es. We
h
ave
li
m
i
te
d
our exposure
by
a
d
opt
i
n
g
esta
bli
s
h
e
d
r
i
s
k
mana
g
ement po
li
c
i
es an
d
p
rocedures, including the use of derivative instruments. It is our policy that derivative transactions are executed onl
y
to mana
g
e exposures ar
i
s
i
n
gi
nt
h
e norma
l
course o
fb
us
i
ness an
d
not
f
or t
h
e purpose o
f
creat
i
n
g
specu
l
at
i
v
e
p
os
i
t
i
ons or tra
di
n
g
. We recor
d
a
ll d
er
i
vat
i
ves on t
h
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
he
accountin
g
for chan
g
es in the fair value of derivatives depends on the intended use of the derivative and whether it
q
ua
lifi
es
f
or
h
e
d
ge account
i
ng. Our
d
er
i
vat
i
ve
i
nstruments are un
d
es
i
gnate
d
,w
i
t
h
c
h
anges
i
n
f
a
i
rva
l
ue recogn
i
ze
d
c
urrent
ly i
nt
h
e conso
lid
ate
d
statement o
f
operat
i
ons. See Note 11, Der
i
vat
i
ve Instruments,
f
or
f
urt
h
er
i
n
f
ormat
i
on.
D
e
b
t Issuance
C
ost
s
—
De
b
t
i
ssuance costs are
i
n
i
t
i
a
ll
y cap
i
ta
li
ze
d
as a
d
e
f
erre
d
cost an
d
amort
i
ze
d
to
i
nterest
e
xpense un
d
er t
h
ee
ff
ect
i
ve
i
nterest met
h
o
d
over t
h
e expecte
d
term o
f
t
h
ere
l
ate
dd
e
b
t. Unamort
i
ze
dd
e
b
t
i
ssuanc
e
c
osts re
l
ate
d
to ext
i
n
g
u
i
s
h
ment o
fd
e
b
t are expense
d
at t
h
et
i
me t
h
e
d
e
b
t
i
sext
i
n
g
u
i
s
h
e
d
an
d
recor
d
e
di
not
h
er
i
ncome (ex
p
enses), net in the consolidated statements of o
p
erations. Unamortized debt issuance costs are recorde
d
i
n other assets in the consolidated balance sheets
.
I
nterest Capita
l
ization —We ca
pi
ta
li
ze
i
nterest re
l
ate
d
to our owne
d
s
p
ectrum
li
censes an
d
t
h
ere
l
ate
d
c
onstruction of our network infrastructure assets. Ca
p
italization of interest commences with
p
re-constructio
n
86
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)