Incredimail 2012 Annual Report Download - page 112

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
The Company accounted for business combination in accordance with ASC No. 805, "Business Combinations". ASC No.
805 requires recognition of assets acquired, liabilities assumed, and any non-
controlling interest at the acquisition date,
measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any
subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance
related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings.
Acquisition related costs are expensed to the statement of income in the period incurred.
Certain amounts in prior years' financial statements have been reclassified to conform to the current year's presentation.
The reclassification had no effect on previously reported net income or shareholders' equity.
On November 30, 2012 ("Closing Date") the Company completed the acquisition of 100% of the shares of Sweet IM Ltd.
("Sweet IM"), an Israeli-
based consumer internet company that produces a variety of applications. The financial results of
Sweet IM are included in the consolidated financial statements from the Closing Date. The total consideration is
composed as follows:
In addition, the Company incurred acquisition related costs in a total amount of $ 1,593, which are included in general and
administrative expenses for the year ended December 31, 2012. Acquisition related costs include legal, accounting fees
and other costs directly related to the acquisition.
NOTE 2:
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SIGNIFICANT ACCOUNTING POLICIES (Cont.)
v.
Business combinations:
w.
Reclassifications:
NOTE 3:- ACQUISITIONS
a.
Acquisition of Sweet IM Ltd.
•
$ 13,054 in cash, including $ 3,014 for working capital acquired from Sweet IM;
•
1,990,000 ordinary shares of the Company issued at closing for total value of $17,863, which considered the market
restrictions on these shares;
•
$ 7,500 in cash (subject to certain adjustments), payable within 12 months following the Closing Date (December
2013). In connection with this consideration, the Company recorded a $ 7,324 liability; and
•
A milestones-based contingent cash payment of up to $7,500 payable in June 2014.
In connection with this
contingent payment consideration, the Company recorded at the Closing Date, an estimated liability of $5,992.
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