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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 six reporting units with goodwill. Of these, IAC Search & Media and Shoebuy have fair values that are closest to their
carrying values. The amount of goodwill of each of these reporting units is $534.0 million and $21.7 million, respectively, at December 31,
2010. To illustrate the magnitude of potential impairment charges related to potential 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, 2010, their estimated fair values would exceed
their carrying values. Had the estimated fair values of each of these reporting units been hypothetically lower by 20% as of October 1, 2010, the
carrying values of IAC Search & Media and Shoebuy would have exceeded their fair values by approximately $9 million and $3 million,
respectively. If operating results of these businesses vary significantly from anticipated results, future, and in the case of IAC Search & Media,
potentially material, impairments of goodwill and/or indefinite-lived intangible assets could occur.
Long-Lived Assets and Intangible Assets with Definite Lives
Long-lived assets, which consist of 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 useful lives.
62
Operating Segment
and
Reporting Unit
Reportable
Segment
IAC Search &
Media
Search
CityGrid Media
Search
Match
Match
ServiceMagic
ServiceMagic
Shoebuy
Media & Other
Connected
Ventures
Media & Other