TripAdvisor 2013 Annual Report Download - page 90

those same assets, using the results of our most recent quantitative assessment. After considering these factors
and the impact that changes in such factors would have on the inputs used in our previous quantitative
assessment, we determined for our goodwill and indefinite-lived intangible assets that it was more likely than not
that these assets were not impaired.
Since the annual impairment tests in October 2013, there have been no events or changes in circumstances
to indicate any potential impairment to goodwill or our indefinite lived intangible assets. In the event that future
circumstances indicate that any portion of our goodwill or our indefinite-lived intangibles is impaired, an
impairment charge would be recorded.
Recoverability of Intangible Assets with Definite Lives and Other Long-Lived Assets
Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a
straight-line basis over their estimated useful lives of two to eleven years. The straight-line method of
amortization is currently used for our definite-lived intangible assets as it approximates, or is our best estimate,
of the distribution of the economic use of our identifiable intangible assets. We review the carrying value of
long-lived assets or asset groups, including property and equipment, to be used in operations whenever events or
changes in circumstances indicate that the carrying amount of the assets might not be recoverable.
Factors that would necessitate an impairment assessment include a significant adverse change in the extent
or manner in which an asset is used, a significant adverse change in legal factors or the business climate that
could affect the value of the asset, or a significant decline in the observable market value of an asset, among
others. If such facts indicate a potential impairment, we assess the recoverability of the asset by determining if
the carrying value of the asset exceeds the sum of the projected undiscounted cash flows expected to result from
the use and eventual disposition of the asset over the remaining economic life of the asset. If the recoverability
test indicates that the carrying value of the asset is not recoverable, we will estimate the fair value of the asset
using appropriate valuation methodologies which would typically include an estimate of discounted cash flows.
Any impairment would be measured by the amount that the carrying value of such assets exceeds their fair value.
We have not identified any circumstances that would warrant an impairment assessment as of December 31,
2013.
Income Taxes
We compute and account for our income taxes on a stand-alone basis. We record income taxes under the
liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of
temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We
determine deferred income taxes based on the differences in accounting methods and timing between financial
statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each
temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items
of income and expense. We consider all relevant factors when assessing the likelihood of future realization of our
deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable
income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax
planning strategies. We may establish a valuation allowance to reduce deferred tax assets to the amount we
believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our
businesses, future changes in income tax law, tax sharing agreements or variances between our actual and
anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could
materially vary from these estimates.
We recognize in our consolidated and combined financial statements the impact of a tax position, if that
position is more likely than not to be sustained upon an examination, based on the technical merits of the
position.
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