Audiovox 2004 Annual Report Download - page 72

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
As a result of adopting the provisions of SFAS No. 142, the
Company did not record amortization expense relating to its
goodwill and the Company reassessed the useful lives and residual
lives of all acquired intangible assets to make any necessary
amortization period adjustments. Based upon that assessment, no
adjustments were made to the amortization period or residual
values of other intangible assets. The cost of other intangible
assets with definite lives are amortized on a straight−line basis
over their respective lives. In addition, the Company was not
required under SFAS No. 142 to assess the useful life and
residual value of its goodwill as the Company's goodwill, at the
time of adoption, was equity method goodwill and, as such, this
equity method goodwill will continue to be evaluated for
impairment under Accounting Principles Board No. 18, "The Equity
Method of Accounting for Investments in Common Stock", as
amended. For intangible assets with indefinite lives, including
goodwill, recorded subsequent to the adoption of SFAS No. 142,
the Company performed its annual impairment test which indicated
no reduction is required.
Goodwill
The change in carrying amount of goodwill is as follows:
November 30,
−−−−−−−−−−−−−−−−−−−−−−−−
2003 2004
−−−−−−− −−−−−−−
Net beginning balance $ 6,826 $ 7,532
Escrow monies collected in connection with Code−Alarm
(See Note 5 of Notes to Consolidated Financial
Statements) −− (513)
Adjustments of certain acquired assets of Code−Alarm
(Note 5 of Notes to Consolidated Financial Statements) 706 −−
−−−−−−− −−−−−−−
Net ending balance $ 7,532 $ 7,019
======= =======
Other Intangible Assets
November 30, 2003 and 2004
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Gross Total Net
Carrying Accumulated Book
Value Amortization Value
−−−−−−−− −−−−−−−−−−−− −−−−−−−−
Patents subject to amortization $ 677 $ 677 −−
Trademarks subject to amortization 34 34 −−
Trademarks not subject to
amortization (Note 5 of Notes
to Consolidated Financial
Statements) 8,043 −− $8,043
−−−−−− −−−−−− −−−−−−
Total $8,754 $ 711 $8,043
====== ====== ======
At November 30, 2004, all intangible assets subject to
amortization have been fully amortized.
69