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Table of Contents
IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Company's reporting units are consistent with its determination of its operating segments. Goodwill is tested for impairment at the
reporting unit level. The Company's operating segments, reporting units and reportable segments are as follows:
Media & Other includes other operating segments that do not have goodwill. See Note 14 for additional information regarding the
Company's method of determining operating and reportable segments.
The Company has seven reporting units with goodwill. Of these, IAC Search & Media, InstantAction.com and Connected Ventures have
fair values that approximate their carrying values. The amount of goodwill of each of the reporting units is $527.6 million, $31.6 million and
$8.4 million, respectively, at December 31, 2009. If operating results of these businesses vary significantly from anticipated results, future,
potentially material, impairments of goodwill and/or indefinite-lived intangible assets could occur. To illustrate the magnitude of potential
impairment charges relative to future changes in estimated fair values, had the estimated fair values of each of these reporting units been
hypothetically lower by 10% as of October 1, 2009, the carrying values of IAC Search & Media, InstantAction.com and Connected Ventures
would have exceeded their respective fair values by approximately $80 million, $4 million and $4 million, respectively. Had the estimated fair
values of each of these reporting units been hypothetically lower by 20% as of October 1, 2009, the carrying values of IAC Search & Media,
InstantAction.com and Connected Ventures would have exceeded their respective fair values by approximately $160 million, $8 million and
$8 million, respectively. Any impairment charge that might result in the future would be determined based upon the excess of the carrying value
of goodwill over its implied fair value but, in any event, would not be expected to be lower than the excess of the carrying value of the reporting
unit over its fair value.
Long-Lived Assets and Intangible Assets with Definite Lives
Long-lived assets, comprising property and equipment and intangible assets with definite lives, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-
lived asset is
not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the
carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-
lived
asset exceeds its fair value. Amortization of definite-lived intangible assets is recorded on a straight-line basis over their estimated lives.
64
Operating Segment
and
Reporting Unit
Reportable
Segment
IAC Search & Media
Search
Citysearch
Search
Match
Match
ServiceMagic
ServiceMagic
Shoebuy
Media & Other
InstantAction.com
Media & Other
Connected Ventures
Media & Other