Support.com 2007 Annual Report Download - page 61

SUPPORTSOFT, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Organization and Summary of Significant Accounting Policies (Continued)
The following table sets forth the unrealized losses for the Company investments as of December 31, 2007 (in thousands):
In Loss Position
Less Than 12 Months
In Loss Position
More Than 12 Months Total In Loss Position
Description Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
Commercial paper $ 6,945 $ (1) $ — $ — $ 6,945 $ (1)
Corporate bonds 11,274 (15) — — 11,274 (15)
Total $ 18,219 $ (16) $ — $ — $ 18,219 $ (16)
Property and Equipment
Property and equipment is stated at cost, less accumulated depreciation which is determined using the straight-line method over the estimated useful lives of
2 years for computer equipment and software, 3 years for furniture and fixtures, and the shorter of the estimated useful lives or the lease term for leasehold
improvements. Repairs and maintenance costs are expensed as incurred.
Goodwill
Goodwill resulted from the Company's acquisition of Core Networks on September 2, 2004. The Company applies the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangibles Assets," which prohibits the amortization of goodwill.
We assess the impairment of goodwill annually or more often if events or changes in circumstances indicate that the carrying value may not be recoverable.
A potential impairment is assessed at the entity level because we have only one reporting unit. An impairment loss would be recognized when the sum of the
discounted future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Such impairment loss
would be measured as the difference between the carrying amount of the asset and its fair value. The estimate of cash flows is based upon, among other things,
certain assumptions about expected future operating performance and an appropriate discount rate determined by our management. Our estimates of discounted
cash flows may differ from actual cash flows due to, among other things, economic conditions, changes to the business model or changes in operating
performance. At September 30, 2007 and 2006, we concluded our annual evaluation for impairment of goodwill and no impairment was recognized.
Intangible Assets
The Company records purchased intangible assets at fair value. The original cost is amortized on a straight-line basis over the estimated useful life of each
asset. We assess the impairment of intangible assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. We
perform an annual review to determine if the carrying value of the intangible asset is impaired, unless events or circumstances indicate a potential impairment
exists in which case a review is performed more often. The review considers facts and circumstances, either internal or external, which indicate that the carrying
value of the asset cannot be recovered. If and when indicators of impairment exist, SupportSoft assesses the need to record an impairment loss, by comparing the
undiscounted net cash flows associated with related assets or group of assets over their remaining lives against their
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Source: SUPPORTSOFT INC, 10-K, March 13, 2008