MoneyGram 2009 Annual Report Download - page 106

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Following is a roll-forward of goodwill by reporting segment:
Global Funds Transfer Financial Paper Products Other
2009 2008 2009 2008 2009 2008
Balance at beginning of year:
Goodwill $ 426,794 $ 422,487 $ 2,487 $ 2,487 $ 20,220 $ 20,220
Accumulated impairment charges — — — — (15,164) (6,355)
426,794 422,487 2,487 2,487 5,056 13,865
Goodwill acquired 2,012 4,307 — — — —
Impairment charge (3,176) — (2,487) — (582) (8,809)
Divestitures — — — — (4,474) —
Balance at end of year:
Goodwill 428,806 426,794 2,487 2,487 15,746 20,220
Accumulated impairment charges (3,176) — (2,487) — (15,746) (15,164)
$ 425,630 $ 426,794 $ — $ 2,487 $ — $ 5,056
Goodwill acquired in 2009 relates to the acquisition of Raphaels Bank. Goodwill acquired in 2008 relates to the acquisitions of
MoneyCard and Cambios Sol. Goodwill related to these acquisitions is not deductible for tax purposes.
In connection with the sale of FSMC in 2009, the Company recorded a charge of $0.6 million to impair goodwill that was in excess of the
final sale price. In addition, goodwill was reduced by $4.5 million from the sale of FSMC. The Company also impaired $3.2 million of
goodwill in 2009 in the Global Funds Transfer segment associated with a decision to discontinue certain bill payment product offerings.
In 2008, the Company decided to wind-down the customer-facing operations of the business formerly known as ACH Commerce after
evaluating the market opportunity for certain of its electronic payment services. As a result, the Company recognized an impairment
charge of $8.8 million in 2008 for the full amount of goodwill related to the ACH Commerce reporting unit. The FSMC and ACH
Commerce reporting units are not components of the Global Funds Transfer and Financial Paper Products segments.
The Company performed an annual assessment of goodwill during the fourth quarters of 2009, 2008 and 2007. As a result of the 2009
annual assessment, it was determined that the fair value of the retail money order reporting unit, a component of the Financial Paper
Products segment, was fully impaired. The Company recorded an impairment charge of $2.5 million to the Financial Paper Products
segment in 2009, which was calculated as the excess of the implied fair value of the retail money order reporting unit over the carrying
amount of goodwill. There were no impairments recognized in 2008 as a result of the annual impairment test. As a result of the 2007
annual assessment, it was determined that the fair value of the FSMC reporting unit was impaired. The Company recorded an impairment
charge of $6.4 million to the FSMC reporting segment in 2007, which was calculated as the excess of the implied fair value over the
carrying amount of goodwill. Goodwill impairment charges are included in the "Transaction and operations support" line of the
Consolidated Statements of Loss.
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