TripAdvisor 2015 Annual Report Download - page 73

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Indefinite-Lived Intangible Assets
IntangibleassetsthathaveindefinitelivesarenotamortizedandaretestedforimpairmentannuallyonOctober1,orwhenevereventsorchangesin
circumstancesindicatethatthecarryingvaluemaynotberecoverable.Similartothequalitativeassessmentforgoodwill,wemayassessqualitativefactorsto
determineifitismorelikelythannotthattheimpliedfairvalueoftheindefinite-livedintangibleassetislessthanitscarryingamount.Ifwedeterminethatitisnot
morelikelythannotthattheimpliedfairvalueoftheindefinite-livedintangibleassetislessthanitscarryingamount,nofurthertestingisnecessary.If,however,
wedeterminethatitismorelikelythannotthattheimpliedfairvalueoftheindefinite-livedintangibleassetislessthanitscarryingamount,wecomparethe
impliedfairvalueoftheindefinite-livedassetwithitscarryingamount.Ifthecarryingvalueofanindividualindefinite-livedintangibleassetexceedsitsimplied
fairvalue,theindividualassetiswrittendownbyanamountequaltosuchexcess.Theassessmentofqualitativefactorsisoptionalandatourdiscretion.Wemay
bypassthequalitativeassessmentforanyindefinite-livedintangibleassetinanyperiodandresumeperformingthequalitativeassessmentinanysubsequentperiod.
Aspartofourqualitativeassessmentforour2015impairmentanalysis,thefactorsthatweconsideredforourindefinite-livedintangibleassetsincluded,but
werenotlimitedto:(a)changesinmacroeconomicconditionsintheoveralleconomyandthespecificmarketsinwhichweoperate,(b)ourabilitytoaccesscapital,
(c)changesintheonlinetravelindustry,(d)changesinthelevelofcompetition,(e)comparisonofourcurrentfinancialperformancetohistoricalandbudgeted
results,(f)changesinexcessmarketcapitalizationoverbookvaluebasedonourcommonstockprice,and(g)theamountofexcessofthefairvalueofourtrade
namesandtrademarkstothecarryingvalueof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thatitwasmorelikelythannotthat
theseassetswerenotimpaired.
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onetotwelve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groupbydeterminingifthecarryingvalueoftheassetgroup
exceedsthesumoftheprojectedundiscountedcashflowsexpectedtoresultfromtheuseandeventualdispositionoftheassetsovertheremainingeconomiclifeof
theprimaryassetofthegroup.Iftherecoverabilitytestindicatesthatthecarryingvalueoftheassetgroupisnotrecoverable,wewillestimatethefairvalueofthe
assetgroup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assetgroupsexceedtheirfairvalueandwouldbeincludedinoperatingincomeontheconsolidatedstatementof
operations.Wehavenotidentifiedanycircumstancesthatwouldwarrantanimpairmentchargeforanyrecordeddefinitelivedorotherlongtermassetsonour
consolidatedbalancesheetatDecember31,2015.
Income Taxes
Werecordincometaxesundertheassetand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recordliabilitiestoaddressuncertaintaxpositionswehavetakeninpreviouslyfiledtaxreturnsorthatweexpecttotakeinafuturetaxreturn.The
determinationforrequiredliabilitiesisbaseduponananalysisofeachindividualtaxposition,takingintoconsiderationwhetheritismorelikelythannotthatour
taxposition,basedontechnicalmerits,willbesustaineduponexamination.
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