Comcast 2011 Annual Report Download - page 88

amortization generated by the underlying assets, current market transactions, and profitability information. If
the value of our cable franchise rights or other indefinite-lived intangible assets were less than the carrying
amount, we would recognize an impairment charge for the difference between the estimated fair value and
the carrying value of the assets. We also evaluate the unit of account used to test for impairment of our cable
franchise rights and other indefinite-lived intangible assets periodically or whenever events or substantive
changes in circumstances occur to ensure impairment testing is performed at an appropriate level. The Cable
Communications divisions represent the units of account we use to test for impairment for our cable franchise
rights.
Goodwill
We assess the recoverability of our goodwill annually, or more frequently whenever events or substantive
changes in circumstances indicate that the asset might be impaired. In our Cable Communications business,
since components one level below the segment level (Cable Communications divisions) are not separate
reporting units and have similar economic characteristics, we aggregate the components into one reporting
unit at the Cable Communications segment level. In our NBCUniversal businesses, our reporting units contain-
ing goodwill are also aggregated at the segment level. The assessment of recoverability considers if the
carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to
the extent the carrying amount of the reporting unit’s goodwill exceeds its implied fair value. Unless pre-
sented separately, the impairment charge is included as a component of amortization expense.
Finite-Lived Intangible Assets
Finite-lived intangible assets subject to amortization consist primarily of customer relationships acquired in
business combinations, cable franchise renewal costs, contractual operating rights, intellectual property
rights and software. These assets are amortized primarily on a straight-line basis over their estimated useful
lives or the terms of the respective agreements. See Note 8 for the ranges of useful lives of our intangible
assets.
We capitalize direct development costs associated with internal-use software, including external direct costs
of material and services and payroll costs for employees devoting time to these software projects. We also
capitalize costs associated with the purchase of software licenses. We include these costs within other
intangible assets and amortize them on a straight-line basis over a period not to exceed 5 years, beginning
when the asset is substantially ready for use. We expense maintenance and trainingcosts,aswellascosts
incurred during the preliminary stage of a project, as they are incurred. We capitalize initial operating system
software costs and amortize them over the life of the associated hardware.
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We evaluate the recoverability of our intangible assets subject to amortization whenever events or substantive
changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is based
on the cash flows generated by the underlying asset groups, including estimated future operating results,
trends or other determinants of fair value. If the total of the expected future undiscounted cash flows is less
than the carrying amount of the asset group, we would recognize an impairment charge to the extent the
carrying amount of the asset group exceeds its estimated fair value. Unless presented separately, the impair-
ment charge is included as a component of amortization expense.
Asset Retirement Obligations
We recognize a liability for an asset retirement obligation in the period in which it is incurred if a reasonable
estimate of fair value can be made.
Comcast 2011 Annual Report on Form 10-K 86