Western Union 2012 Annual Report Download - page 80

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75
Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions
Other Intangible Assets
We capitalize acquired intangible assets as
well as certain initial payments for new
and renewed agent contracts and software.
We evaluate such intangible assets for
impairment on an annual basis and
whenever events or changes in
circumstances indicate the carrying
amount of such assets may not be
recoverable. In such reviews, estimated
undiscounted cash flows associated with
these assets or operations are compared
with their carrying amounts to determine
if a write-down to fair value (normally
measured by the present value technique)
is required.
The capitalization of initial payments for
new and renewed agent contracts is
subject to strict accounting policy criteria
and requires management judgment as to
the amount to capitalize and the related
period of benefit. Our accounting policy
is to limit the amount of capitalized costs
for a given agent contract to the lesser of
the estimated future cash flows from the
contract or the termination fees we would
receive in the event of early termination
of the contract.
The estimated undiscounted cash flows
associated with each asset requires us to
make estimates and assumptions,
including, among other things, revenue
growth rates, and operating margins based
on our budgets and business plans.
Disruptions to contractual relationships,
significant declines in cash flows or
transaction volumes associated with
contracts, or other issues significantly
impacting the future cash flows associated
with the contract would cause us to
evaluate the recoverability of the asset.
If an event described above occurs and
causes us to determine that an asset has
been impaired, that could result in an
impairment charge.
The net carrying value of our other
intangible assets as of December 31, 2012
was $878.9 million.