Travelzoo 2004 Annual Report Download - page 56

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TRAVELZOO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
these Ñnancial statements in conformity with accounting principles generally accepted in the United States of
America. Actual results could diÅer from those estimates.
(e) Property and Equipment
Property and equipment consisted of the following:
December 31,
2004 2003
Computer hardware and softwareÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $323,746 $316,837
OÇce equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 226,587 193,722
550,333 510,559
Less accumulated depreciationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 441,934 346,525
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $108,399 $164,034
Property and equipment are stated at cost less accumulated depreciation. Additions, improvements and
major renewals are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. Deprecia-
tion is provided using the straight-line method over the estimated useful lives of the assets. Estimated useful
lives are 3 years for property and equipment.
(f) Intangible Assets
Intangible assets consist of the following:
December 31,
2004 2003
Acquired amortized intangible assets:
Internet domain names ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $347,547 $344,857
Less accumulated amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 263,984 198,064
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 83,563 $146,793
Amortization expense was $65,920, $65,500 and $78,518 for the years ended December 31, 2004, 2003
and 2002, respectively.
In October 2001, the Company completed the acquisition of the weekends.com domain name. As
consideration for the purchase, the Company paid the seller $125,000 and agreed to provide a minimum
number of clicks to the seller's other Web sites through advertising placed on the Travelzoo Web site. The fair
value of the advertising services of $89,286 was determined based on the cash price of similar advertising
services and recorded as deferred revenue. The revenue was recognized as the clicks were delivered. During
the years ended December 31, 2002, $3,410 of revenue related to this arrangement was recognized. The
agreement with the seller to provide advertising services expired on September 30, 2002. As such, $69,427 of
advertising was not delivered and the carrying amounts of the intangible asset and related deferred revenue
were reduced accordingly.
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