Audiovox 2005 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2005 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 111

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111

(l) Goodwill and Other Intangible Assets
Goodwill and other intangible assets consist of the excess over
the fair value of assets acquired (goodwill) and other intangible
assets (patents, contracts and trademarks/tradenames).
Statement of Financial Accounting Standards ("SFAS") No. 142
"Goodwill and Other Intangible Assets" requires that goodwill and
intangible assets with indefinite useful lives be tested for
impairment at least annually or more frequently if an event
occurs or circumstances change that could more likely than not
reduce the fair value of a reporting unit below its carrying
amount. Equity method goodwill is evaluated for impairment under
Accounting Principles Board No. 18, "The Equity Method of
Accounting for Investments in Common Stock", as amended. SFAS No.
142 also requires that intangible assets with estimable useful
lives be amortized over their respective estimated useful lives
and reviewed for impairment in accordance with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long−Lived Assets".
For intangible assets with indefinite lives, including goodwill,
the Company performed its annual impairment test, as of the end
of the fiscal fourth quarter, which indicated no reduction is
required. The cost of other intangible assets with definite lives
are amortized on a straight−line basis over their respective
lives.
Goodwill
The change in carrying amount of goodwill is as follows:
NOVEMBER 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2004 2005
−−−−−−−−−−−− −−−−−−−−−−−−−
Net beginning balance $7,532 $7,019
Escrow monies collected in connection with Code−Alarm (Note 4) (513) −
Goodwill from Terk acquisition (Note 4) 8,869
Purchase of minority interest (Note 17) − 250
−−−−−−−−−−− −−−−−−−
Net ending balance $7,019 $16,138
======= =======
The entire goodwill balance is considered tax deductible.
Other Intangible Assets
NOVEMBER 30, 2004
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
GROSS ACCUMULATED TOTAL NET
CARRYING
VALUE AMORTIZATION BOOK VALUE
−−−−−−−−−−−−− −−−−−−−−−−−−−−−−−− −−−−−−−−−−−−−−−
Trademarks/Tradenames not subject to
amortization $ 8,043 − $ 8,043
−−−−−−− −−−−−−− −−−−−−−
Total $ 8,043 $ − $ 8,043
======= ==== =======
F−17