Rosetta Stone 2010 Annual Report Download - page 96
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Table of Contents
7. INTANGIBLE ASSETS
Intangible assets consisted of the following items as of the dates indicated (in thousands):
December 31, 2010 December 31, 2009
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Amount
Trade name / trademark $ 10,607 $ — $ 10,607 $ 10,607 $ — $ 10,607
Core technology 2,453 (2,453) — 2,453 (2,453) —
Customer relationships 10,844 (10,800) 44 10,842 (10,747) 95
Website 12 (12) — 12 (10) 2
Patents 300 (3) 297 — — —
Total $ 24,216 $ (13,268)$ 10,948 $ 23,914 $ (13,210)$ 10,704
The Company recorded intangible assets of $23.8 million, associated with the acquisition of Rosetta Stone Ltd. in January 2006, and $0.1 million with
the acquisition of certain assets of SGLC International Co. Ltd. in November 2009. During 2010, the Company recorded the purchase of two patents
associated with the development of new products in the amount of $0.3 million. The estimated lives of the acquired core technology and customer
relationships are between 18 to 36 months. The intangible asset associated with the trade name and trademark has an indefinite useful life. The estimated life
of the website rights is 60 months, and estimated useful life of the patents are based on the effective date of the purchase agreement through the expiration
date of the patents. The Company computes amortization of intangible assets on a straight-line basis over the estimated useful life. Below are the estimated
useful lives of the intangible assets acquired:
Weighted
Average
Life
Trade name / trademark Indefinite
Core technology 24 months
Customer relationships 24 months
Website 60 months
Patents 72 - 100 months
Amortization expense consisted of the following (in thousands):
Years Ended December 31,
2010 2009 2008
Included in cost of revenue:
Cost of product revenue $ — $ — $ 13
Cost of subscription and service revenue — — —
Total included in cost of revenue — — 13
Included in operating expenses: $ 58 $ 42 $ 3,003
Total $ 58 $ 42 $ 3,016
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