Rosetta Stone 2011 Annual Report Download - page 103
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Table of Contents
ROSETTA STONE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. ACQUISITIONS (Continued)
$100,000, the total purchase price was $950,000. In 2011 and 2010, we made additional payments of $350,000 and $400,000 respectively in accordance with
the terms of the purchase.
Under the purchase method of accounting, the total purchase price was allocated to the tangible and intangible assets acquired on the basis of their
respective estimated fair values at the date of acquisition. The valuation of the identifiable intangible assets and their useful lives acquired reflects
management's estimates.
The summary of fair value of assets acquired in the asset acquisition is as follows (in thousands):
Tangible assets:
Inventory $ 135
Property and equipment 95
Intangible assets:
Customer relationships 100
Goodwill 620
Total assets acquired $ 950
A total of $100,000 was allocated to amortizable intangible assets consisting of customer relationships, and a total of $620,257 was allocated to goodwill.
Goodwill represents the excess of the purchase price over the fair value of tangible and amortizable intangible assets acquired.
5. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following (in thousands):
As of December 31,
2011 2010
Land $ 390 $ 390
Buildings and improvements 8,120 8,110
Leasehold improvements 1,739 1,682
Computer equipment 14,534 12,046
Software 17,168 13,723
Furniture and equipment 5,980 4,158
47,931 40,109
Less: accumulated depreciation (27,062) (19,036)
Property and equipment, net $ 20,869 $ 21,073
The Company leases certain computer equipment, software and machinery under capital lease agreements. As of December 31, 2011 and 2010, leased
computer equipment and software included in property and equipment above was $72,000 and $56,000, respectively.
The Company recorded depreciation expense for the years ended December 31, 2011, 2010 and 2009 in the amount of $8.6 million, $6.6 million and
$5.4 million, respectively.
F-22