Qualcomm 2014 Annual Report Download - page 67

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
infrastructure assets in India by the Company’s former BWA subsidiaries was capitalized beginning in May 2012 through the third quarter of
fiscal 2013 when the BWA subsidiaries were deconsolidated (Note 10). Interest capitalized by the former BWA subsidiaries totaled $65 million
in fiscal 2013 .
Goodwill and Other Intangible Assets. Goodwill represents the excess of purchase price over the value assigned to the net tangible and
identifiable intangible assets of businesses acquired. Acquired intangible assets other than goodwill are amortized over their useful lives unless
the lives are determined to be indefinite. For intangible assets purchased in a business combination, the estimated fair values of the assets
received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the
assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless
the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are
measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach
and/or cost approach are used to measure fair value.
Weighted-average amortization periods for finite-lived intangible assets, by class, were as follows (in years):
Impairment of Goodwill, Other Indefinite-Lived Assets and Long-Lived Assets. Goodwill and other indefinite-lived intangible assets are
tested annually for impairment in the fourth fiscal quarter and in interim periods if certain events occur indicating that the carrying amounts may
be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible
asset is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed.
If goodwill is quantitatively assessed for impairment, a two-
step approach is applied. First, the Company compares the estimated fair value of the
reporting unit in which the goodwill resides to its carrying value. The second step, if necessary, measures the amount of impairment, if any, by
comparing the implied fair value of goodwill to its carrying value. Other indefinite-lived intangible assets are quantitatively assessed for
impairment, if necessary, by comparing their estimated fair values to their carrying values. If the carrying value exceeds the fair value, the
difference is recorded as an impairment.
Long-lived assets, such as property, plant and equipment and intangible assets subject to amortization, are reviewed for impairment when
there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted
future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated
future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the
estimated fair value of the asset or asset group. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or
their estimated fair values less costs to sell and are not depreciated.
Revenue Recognition. The Company derives revenues principally from sales of integrated circuit products, licensing of its intellectual
property and sales of software hosting, software development and other services. The timing of revenue recognition and the amount of revenue
actually recognized in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of the
Company’s deliverables and obligations.
Revenues from sales of the Company’s products are recognized at the time of shipment, or when title and risk of loss pass to the customer
and other criteria for revenue recognition are met, if later. Revenues from providing services are recognized when earned. Revenues from
providing services were less than 10% of total revenues for all periods presented.
The Company licenses or otherwise provides rights to use portions of its intellectual property portfolio, which includes certain patent rights
essential to and/or useful in the manufacture and sale of certain wireless products. Licensees typically pay a fixed license fee in one or more
installments and royalties based on their sales of products incorporating or using the Company’s licensed intellectual property. License fees are
recognized over the estimated period of benefit of the license to the licensee, typically 5 to 15 years . The Company earns royalties on such
licensed products sold worldwide by its licensees at the
F- 11
September 28,
2014
September 29,
2013
Wireless spectrum
14
14
Marketing-related
9
9
Technology-based
11
11
Customer-related
6
2
Total finite-lived intangible assets
11
11