Incredimail 2013 Annual Report Download - page 115

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
The Company accounts for comprehensive income in accordance with ASC 220, "Comprehensive Income". This
statement establishes standards for the reporting and display of comprehensive income and its components in a full set of
general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity
during the period except those resulting from investments by, or distributions to, shareholders. The Company determined
that its items of other comprehensive income relates to unrealized gains and losses on available for sale securities.
The Company accounted for business combination in accordance with ASC No. 805, "Business Combinations". ASC No.
805 requires recognition of assets acquired, liabilities assumed, and any non-
controlling interest at the acquisition date,
measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any
subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance
related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings.
Acquisition related costs are expensed to the statement of income in the period incurred.
On November 30, 2012 ("Closing Date") the Company completed the acquisition of 100% of the shares of Sweet IM Ltd.
("SweetIM"), an Israeli-
based consumer internet company that produces a variety of applications. The financial results of
SweetIM are included in the consolidated financial statements from the Closing Date. The total consideration was
composed as follows:
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
u.
Comprehensive income:
v.
Business combinations:
NOTE 3:- ACQUISITIONS
a.
Acquisition of Sweet IM Ltd.
• $ 13,054 in cash, including $ 3,014 for working capital acquired from Sweet IM;
•
1,990,000 ordinary shares of the Company issued at closing for total value of $17,863, which considered the
market restrictions on these shares;
•
$ 7,500 in cash ("Second installment") subject to certain adjustments, payable within 12 months following the
Closing Date (December 2013). In connection with this consideration, the Company recorded a $ 7,324 liability;
and
• A milestones-
based contingent cash payment of up to $ 7,500 payable in May 2014. In connection with this
contingent payment consideration, the Company recorded at the Closing Date, an estimated liability of $ 5,992.
(Refer to note 8b for further details)
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