Canon 2007 Annual Report Download - page 79

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9. Acquisitions
In 2007, the Company and one of its subsidiaries acquired
two companies for a total cost of ¥26,387 million ($231,465
thousand). One company, which was acquired with cash, is
engaged in developing, manufacturing, selling and providing
services for equipment used in the manufacture of organic EL
display panels and thin-film solar cells. The other company, which
was acquired with cash and share exchange by the subsidiary of
the Company, is engaged in providing architecture, manage-
ment and maintenance services for information systems. In
connection with those transactions, Canon recognized goodwill
of ¥10,086 million ($88,474 thousand) and intangible assets of
¥2,915 million ($25,570 thousand), which were classified as
other assets in the accompanying consolidated balance sheets.
Intangible assets consist primarily of customer contracts and
related customer relationships, and are subject to a weighted
average amortization period of approximately 14 years.
In 2005, the Company acquired two companies for a total
cost of ¥20,205 million, which was paid in cash. Those companies
are engaged in the development, manufacturing and sales of
semiconductor manufacturing equipment, factory automation
equipment and vacuum equipment for production of electronic
parts, including semiconductors, flat panel displays, magnetic
heads and hard disc drives. In connection with those transactions,
Canon recognized goodwill of ¥4,885 million and intangible
assets of ¥16,382 million, which were classified as other assets in
the accompanying consolidated balance sheets. Intangible assets
consist primarily of developed technology, and are subject to a
weighted average amortization period of approximately 9 years.
Canon acquired businesses other than those described
above for the years ended December 31, 2007, 2006 and 2005
that were not material to its consolidated financial statements.
Canon has included the results of operations of these trans-
actions prospectively from the respective dates of transactions.
Canon has not presented pro forma results of operations of the
acquired businesses because the results are not material to its
consolidated results of operations on either an individual or an
aggregate basis.
10. Goodwill and Other Intangible Assets
Intangible assets developed or acquired during the year ended
December 31, 2007 totaled ¥44,592 million ($391,158 thou-
sand), which are subject to amortization and primarily consist
of software of ¥36,513 million ($320,289 thousand), which
is mainly for internal use, and license fees of ¥1,486 million
($13,035 thousand), in addition to those recorded from
acquired businesses. The weighted average amortization period
for software and license fees is approximately 4 years and 8
years, respectively.
The components of acquired intangible assets subject to
amortization included in other assets at December 31, 2007
and 2006 were as follows:
December 31 2007 2006
Gross carrying Accumulated Gross carrying Accumulated
Millions of yen amount amortization amount amortization
Software ¥174,645 ¥ 96,445 ¥140,756 ¥ 76,120
License fees 22,825 11,697 23,681 11,257
Other 31,488 9,241 24,899 4,919
¥228,958 ¥117,383 ¥189,336 ¥ 92,296
2007
Gross carrying Accumulated
Thousands of U.S. dollars amount amortization
Software $1,531,974 $ 846,009
License fees 200,219 102,605
Other 276,211 81,061
$2,008,404 $1,029,675