Tucows 2013 Annual Report Download - page 53

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Depreciation of property and equipment
$
190,420
$
187,005
Increase over prior period
$
3,415
Increase - percentage
2
%
Percentage of net revenues
0
%
0
%
Depreciation costs for Fiscal 2012 remained essentially flat at $0.2 million.
LOSS ON DISPOSITION OF PROPERTY AND EQUIPMENT
Year ended December 31,
2012
2011
Loss on disposition of property and equipment
$
118,944
$
42,165
Increase over prior period
$
76,779
Increase - percentage
182
%
Percentage of net revenues
0
%
0
%
As part of our ongoing initiatives to improve the efficiency of our production environment, we retired some older
computer hardware at our co-location facilities during Fiscal 2012, which resulted in a loss on the disposition of such
equipment.
AMORTIZATION OF INTANGIBLE ASSETS
Year ended December 31,
2012
2011
Amortization of intangible assets
$
876,120
$
1,004,950
Decrease over prior period
$
(128,830
)
Decrease - percentage
(13
)%
Percentage of net revenues
1
%
1
%
Amortization of intangible assets consists of amounts arising in connection with the acquisition of Mailbank.com
Inc. in June 2006, the acquisition of Innerwise, Inc. in July 2007 and the acquisition of EPAG in August 2011.
55
The brand and customer relationships acquired in connection with the acquisitions of Boardtown Corporation,
Innerwise Inc. and EPAG are being amortized on a straight-line basis over seven years.
Customer relationships acquired in connection with the acquisition of Mailbank.com Inc. are amortized on a
straight-line basis over five years.
Technology acquired in connection with the acquisition of EPAG is amortized on a straight-line basis over two
years.
LOSS (GAIN) ON CURRENCY FORWARD CONTRACTS
Although our functional currency is the U.S. dollar, a major portion of our fixed expenses are incurred in Canadian
dollars. Our goal with regard to foreign currency exposure is, to the extent possible; to achieve operational cost certainty,
manage financial exposure to certain foreign exchange fluctuations and to neutralize some of the impact of foreign currency
exchange movements. Accordingly, we enter into foreign exchange contracts to mitigate the exchange rate risk on portions of
our Canadian dollar exposure.
As we do not comply with the documentation requirements for hedge accounting on certain of our foreign exchange
contracts, we account for the fair value of the derivative instruments on these contracts within the consolidated balance sheet
as a derivative financial asset or liability and the corresponding change in fair value is recorded in the consolidated statement
of operations.
Year ended December 31,
2012
2011
Loss (gain) on currency forward contracts
$
(682,851
)
$
535,223
(Decrease) increase over prior period
$
(1,218,074
)
(Decrease) /increase - percentage
(228
)%