Go Daddy 2015 Annual Report Download - page 101

Table of Contents
GoDaddy Inc.
Notes to Consolidated Financial Statements
(In millions, except share amounts which are reflected in thousands and per share amounts)
original effective date. The new standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as
of the date of adoption. We are currently evaluating the timing of our adoption and the impact of this new standard on our consolidated financial statements.
In February 2015 , the FASB issued new guidance related to consolidations. The new standard amends the guidelines for determining whether certain legal
entities should be consolidated. The new standard is effective for annual and interim reporting periods beginning after December 15, 2015 . The adoption of this
guidance in the fourth quarter of 2015 did not have a material impact on our consolidated financial statements.
In April 2015 , the FASB issued new guidance related to accounting for fees paid in a cloud computing arrangement. The new standard provides guidance to
customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer
should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement
does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for annual and interim
reporting periods beginning after December 15, 2015 , with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on
our consolidated financial statements.
In February 2016 , the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets and liabilities arising
from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for
its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present
value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on
the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the
asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and
corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of
cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information
about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018 , and interim periods
within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period
presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases
and amounts previously recognized in accordance with the business combinations guidance for leases. We are currently evaluating our expected adoption method
and the impact of this new standard on our consolidated financial statements.
3. Business Acquisitions
2015 Acquisitions
During the year ended December 31, 2015 , we completed four acquisitions for cash of $64.7 million and additional contingent earn-out payments subject to
the achievement of certain revenue targets. We recognized a liability of $0.9 million representing the initial estimated fair value of the contingent consideration at
the acquisition date. These acquisitions are not material to our results of operations, and as a result, no proforma financial information is presented.
The aggregate purchase price was allocated to the assets acquired and liabilities assumed based upon our assessment of fair values as of the respective
acquisition dates with $60.2 million attributed to identified indefinite-lived intangible assets, $3.2 million to other identified finite-lived intangible assets, $2.2
million to goodwill, which is deductible for income tax purposes, and $0.9 million of net liabilities assumed. Identified intangible assets, which were valued using
either income- or cost-based approaches, include an indefinite-lived domain portfolio and customer-related intangible assets, developed technology and branding.
The acquired finite-lived intangible assets have a weighted-average amortization period of 2.0 years .
2014 Acquisition
During 2014, we completed an acquisition for cash of $42.0 million and additional contingent earn-out payments of up to an additional $3.0 million payable
upon the achievement of specified milestones. We recognized a liability of $2.3 million representing the estimated fair value of the contingent consideration at the
acquisition date. This acquisition is not material to our results of operations.
95