Invacare 2011 Annual Report Download - page 90

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Intangibles
All of the company’s other intangible assets have been assigned definite lives and continue to be amortized
over their useful lives, except for $31,777,000 related to trademarks, which have indefinite lives. The changes in
intangible balances reflected on the balance sheet from December 31, 2010 to December 31, 2011 were the result
of foreign currency translation and amortization except for intangible write-downs, noted below, which totaled
$1,761,000 and additions resulting from acquisitions. As a result of the DMS acquisition, a customer list
intangible of $18,800,000, which was assigned a ten-year life, other intangibles of $1,000,000, which were
assigned four-year lives, and a trademark intangible of $400,000, which was assigned a five-year life, were
recorded by the IPG segment. The IPG segment also acquired a developed technology intangible of $801,000,
which was assigned a seven-year life, and a trademark intangible of $295,000, which has an indefinite life.
The company’s intangibles consist of the following (in thousands):
December 31, 2011 December 31, 2010
Historical
Cost
Accumulated
Amortization
Historical
Cost
Accumulated
Amortization
Customer Lists ..................................... $ 94,790 $50,832 $ 72,998 $40,071
Trademarks ........................................ 31,777 — 31,246 —
License agreements .................................. 3,160 3,160 3,183 2,958
Developed Technology ............................... 9,823 4,870 8,521 3,988
Patents ............................................ 6,358 5,266 7,518 5,863
Other ............................................. 7,510 5,970 6,092 5,767
$153,418 $70,098 $129,558 $58,647
Amortization expense related to other intangibles was $10,542,000, $8,451,000 and $8,671,000 for 2011,
2010 and 2009, respectively. Estimated amortization expense for each of the next five years is expected to be
$10,175,000 for 2012, $9,414,000 in 2013, $8,633,000 in 2014, $7,219,000 in 2015 and $5,440,000 in
2016. Amortized intangibles are being amortized on a straight-line basis for periods from 3 to 20 years with the
majority of the intangibles being amortized over a life of between 10 and 13 years.
In accordance with ASC 350, Intangibles—Goodwill and Other, the company reviews intangibles for
impairment. The company’s intangible assets consist of intangible assets with defined lives as well as intangible
assets with indefinite lives. Defined-lived intangible assets consist principally of customer lists, developed
technology, license agreements, patents and other miscellaneous intangibles such as non-compete agreements.
The company’s indefinite lived intangible assets consist entirely of trademarks.
The company evaluates the carrying value of definite-lived assets whenever events or circumstances
indicate possible impairment. Definite-lived assets are determined to be impaired if the future un-discounted cash
flows expected to be generated by the asset are less than the carrying value. Actual impairment amounts for
definite-lived assets are then calculated using a discounted cash flow calculation. The company reviews
indefinite-lived assets for impairment annually in the fourth quarter of each year and whenever events or
circumstances indicate possible impairment. Any impairment amounts for indefinite-lived assets are calculated as
the difference between the future discounted cash flows expected to be generated by the asset less than the
carrying value for the asset.
During the fourth quarter of 2011, the company recognized intangible write-down charges of $1,761,000
comprised of: customer list impairment of $625,000 in the IPG segment, customer list impairment of $508,000 in
the NA/HME segment, indefinite-lived trademark impairment of $427,000 in the Europe segment and an
FS-18