Stamps.com 2007 Annual Report Download - page 49

generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007 and should be applied prospectively, except in the
case of a limited number of financial instruments that require retrospective application. However in December 2007, the FASB
issued a proposed staff position that would delay the effective date of SFAS 157 for nonfinancial assets and nonfinancial
liabilities to fiscal years beginning after November 15, 2008. We do not believe that the adoption of SFAS 157 will materially
impact our financial statements.
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NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies – (continued)
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities —
including an amendment of FAS 115” (SFAS 159). SFAS 159 allows entities to choose, at specified election dates, to measure
eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company
elects the fair value option for an eligible item, changes in that item’s fair value in subsequent reporting periods must be
recognized in current earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We do not believe that
the adoption of SFAS 159 will materially impact our financial statements.
In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (SFAS 141R). SFAS 141R
establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial
statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree, as well as the
goodwill acquired. Significant changes from current practice resulting from SFAS 141R include the expansion of the definitions
of a “business” and a “business combination.” For all business combinations (whether partial, full or step acquisitions), the
acquirer will record 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values;
contingent consideration will be recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair
value will be recognized in earnings until settlement; and acquisition-related transaction and restructuring costs will be expensed
rather than treated as part of the cost of the acquisition. SFAS 141R also establishes disclosure requirements to enable users to
evaluate the nature and financial effects of the business combination. SFAS 141R applies prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15,
2008. We do not believe that the adoption of SFAS 141R will materially impact our financial statements.
3. Intangible Assets
Our other intangible assets, which consist of acquired patents, trademarks and other intellectual property with a gross
carrying value of $8.3 million as of December 31, 2007 and 2006, respectively, and accumulated amortization of $7.4 million
and $6.3 million as of December 31, 2007 and 2006, respectively, continue to be amortized over their expected useful lives
ranging from 4 to 17 years with a remaining weighted average amortization period of 1year. During 2007, 2006 and 2005, we
assessed whether events or changes in circumstances occurred that could potentially indicate that the carrying amount of our
intangible assets may not be recoverable. We concluded that there were no such events or changes in circumstances during 2007,
2006 and 2005.
Aggregate amortization expense on patents and trademarks was approximately $1.1 million each for 2007, 2006, and 2005.
Amortization expense on patents and trademarks is estimated to approximately $625,000 for 2008.
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