IBM 2005 Annual Report Download - page 70
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NotestoConsolidatedFinancialStatements
INTERNATIONALBUSINESSMACHINESCORPORATION ANDSUBSIDIARYCOMPANIES
_69
(Dollarsinmillions)
ATDECEMBER31,2004
GROSS NET
CARRYING ACCUMULATED CARRYING
INTANGIBLEASSETCLASS AMOUNT AMORTIZATION AMOUNT
Capitalizedsoftware $«1,565 $««««(680) $««««885
Client-related 861 (335) 526
Completedtechnology 364 (206) 158
Strategicalliances 104 (47) 57
Patents/trademarks 33 (11) 22
Other* 247 (106) 141
Total $«3,174 $«(1,385) $«1,789
* Otherintangiblesareprimarilyacquiredproprietaryandnonproprietarybusiness
processes,methodologiesandsystems,and impactsfromcurrencytranslation.
Thecompanyamortizes intangibleassetsovertheirestimated
usefullivesunlesssuchlivesaredeemedindefinite.Amortizable
intangible assets are tested for impairment based on undis-
countedcashflows, and,ifimpaired,writtendowntofairvalue
based on either discounted cash flows or appraised values.
Intangible assets with indefinite lives are tested annually for
impairment and written down to fair value as required. No
impairmentofintangibleassetshasbeenidentifiedduringany
oftheperiodspresented.
Thenetcarryingamountofintangibleassets decreasedby
$126 million for the year ended December 31, 2005, primarily
dueto theamortizationof acquiredintangibles, partially offset
byincreasesinsoftwarecapitalizations.
Totalamortizationwas$1,041 million,$956millionand$955
millionfortheyearsendedDecember31,2005,2004and2003,
respectively.Theaggregateamortizationexpenseforacquired
intangibles (excluding capitalized software) was $367 million,
$370millionand$349millionfortheyearsendedDecember31,
2005,2004and2003,respectively.
The future amortization expense for each of the five suc-
ceedingyearsrelatingtoallintangibleassetsthatarecurrently
recordedintheConsolidatedStatementofFinancialPositionis
estimatedtobethefollowingatDecember31,2005:
(Dollarsinmillions)
2006 $«884
2007 490
2008 177
2009 86
2010 22
Goodwill
Thechangesinthecarryingamountofgoodwill,byreportingsegment,fortheyearendedDecember31,2005,areasfollows:
(Dollarsinmillions)
FOREIGN
BALANCE PURCHASE CURRENCY BALANCE
JANUARY 1, GOODWILL PRICE TRANSLATION DECEMBER 31,
SEGMENT 2005 ADDITIONS ADJUSTMENTS DIVESTITURES ADJUSTMENTS 2005
GlobalServices $«5,171 $««««301 $«37 $«(14) $«(377) $«5,118
SystemsandTechnologyGroup 226 34 — (3) (3) 254
Software 3,021 1,096 (45) — (3) 4,069
GlobalFinancing ——————
EnterpriseInvestments ——————
PersonalComputingDivision 19 — — (19) — —
Total $«8,437 $«1,431 $««(8) $«(36) $«(383) $«9,441