MoneyGram 2010 Annual Report Download - page 101

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Property and Equipment — Property and equipment includes agent equipment, communication equipment, computer hardware, computer
software, leasehold improvements, office furniture and equipment, land and signs, and is stated at cost net of accumulated depreciation.
Property and equipment, with the exception of land, is depreciated using a straight-line method over the term of the lease or license. Land
is not depreciated. The cost and related accumulated depreciation of assets sold or disposed of are removed from the financial statements,
with the resulting gain or loss, if any, recognized under the caption "Occupancy, equipment and supplies" in the Consolidated Statements
of Income (Loss). Estimated useful lives by major asset category are generally as follows:
Agent equipment 3 years
Communication equipment 5 years
Computer hardware 3 years
Computer software Lesser of the license term or 5-7 years
Leasehold improvements Lesser of the lease term or 10 years
Office furniture and equipment Lesser of the useful life or 7 years
Signage 3 years
For the years ended December 31, 2010 and 2009, software development costs of $14.2 million and $9.8 million, respectively, were
capitalized. At December 31, 2010 and 2009, there is $40.9 million and $35.5 million, respectively, of unamortized software
development costs included in property and equipment.
Tenant allowances for leasehold improvements are capitalized as leasehold improvements upon completion of the improvement and
depreciated over the shorter of the remaining term of the lease or 10 years.
Goodwill and Intangible Assets — Goodwill represents the excess of the purchase price over the fair value of net assets acquired in
business combinations and is assigned to the reporting unit in which the acquired business will operate. Intangible assets are recorded at
their estimated fair value at the date of acquisition or at cost if internally developed. Goodwill and intangible assets with indefinite lives
are not amortized, but are instead subject to impairment testing. Intangible assets with finite lives are amortized using a straight-line
method over their respective useful lives as follows:
Customer lists 3-15 years
Patents 15 years
Non-compete agreements 3 years
Trademarks 36-40 years
Developed technology 5 years
Goodwill and intangible assets are tested for impairment annually as of November 30, or whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Goodwill is tested for impairment using a fair-value based approach, and is
assessed at the reporting unit level. The carrying value of the reporting unit is compared to its estimated fair value, with any excess of
carrying value over fair value deemed to be an indicator of potential impairment, in which case a second step is performed comparing the
recorded amount of goodwill to its implied fair value. Intangible assets with finite lives and other long-lived assets are tested for
impairment by comparing the carrying value of the assets to the estimated future undiscounted cash flows to be generated by the asset. If
an impairment is determined to exist for goodwill and intangible assets, the carrying value of the asset is reduced to the estimated fair
value.
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