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SUPPORTSOFT, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Organization and Summary of Significant Accounting Policies (Continued)
In December 2007 the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements," which establishes accounting and
reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for business
arrangements entered into in fiscal years beginning on or after December 15, 2008, which means that it will be effective for our fiscal year beginning January 1,
2009. Early adoption is prohibited. The Company is currently evaluating the impact of adopting SFAS No. 141 on its consolidated financial statements.
Note 2. Property and Equipment
Property and equipment are stated at cost and consist of the following (in thousands):
December 31,
2007
2006
Computer equipment and software $ 4,110 $ 10,426
Furniture and office equipment 897 658
Leasehold improvements 1,172 337
6,179 11,421
Accumulated depreciation (4,093) (10,484)
$ 2,086 $ 937
Depreciation expense was $1.3 million, $988,000, and $1.1 million, for the years ended December 31, 2007, 2006, and 2005, respectively.
Note 3. Intangible assets
Amortization expense related to amortizable intangible assets was $1.1 million in each of the years ended December 31, 2007, 2006, and 2005. Effective
December 31, 2007, we ceased actively selling certain products we had previously acquired from Core Networks in 2004. In connection with this action and a
re-evaluation of all of the Core Network intangible assets, we recognized an impairment loss of approximately $1.7 million in the fourth quarter of 2007. An
impairment loss was recognized because the sum of the discounted future net cash flows expected to result from the use of the assets was less than the carrying
amounts. Such impairment loss was measured as the difference between the carrying amounts of the assets and their fair value. After recognition of the
impairment loss, the intangible asset at December 31, 2007 was $90,000 and has a remaining useful life of 9 months.
In December 2006, the Company acquired the use of a toll-free telephone number for cash consideration of $250,000. This asset has an indefinite useful life.
The intangible asset will be tested for impairment annually or more often if events or changes in circumstances indicate that the carrying value may not be
recoverable.
67
Source: SUPPORTSOFT INC, 10-K, March 13, 2008