Stamps.com 2015 Annual Report Download - page 68
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STAMPS.COM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
During2015,2014and2013,wedidnotrecognizerevenuefromanyonecustomerthatrepresented10%ormoreofrevenues.
Wedonothaveanycustomersrepresenting10%ormoreoftotalaccountsreceivableasofDecember31,2015and2014,
respectively.Wehaveaccountsreceivablefromonepartnerthatrepresentedapproximately17%ofthetotalaccountsreceivable
balanceasofDecember31,2014.
Inventories
Inventoriesconsistoffinishedproductssoldthroughoursuppliesstoreandareaccountedforusingthelowerofcost(first-in,first-
outmethod)ormarket.Inventoriesreportedasacomponentofothercurrentassetsin2015and2014were$3.5millionand$2.4
million,respectively.
Property and Equipment
Weaccountforpropertyandequipmentatcostlessaccumulateddepreciationandamortization.Wecomputedepreciationusing
thestraight-linemethodovertheestimatedusefullifeoftheasset,generallythreetofiveyearsforfurniture,fixturesandequipment
andtentofortyyearsforbuildingandbuildingimprovements.Wehaveapolicyofcapitalizingexpendituresthatmateriallyincrease
assets’usefullivesandchargingordinarymaintenanceandrepairstooperationsasincurred.Whenpropertyorequipmentisdisposed
of,thecostandrelatedaccumulateddepreciationandamortizationareremoved,andanygainorlossisincludedinoperations.
Business Combinations
Theacquisitionmethodofaccountingisusedforbusinesscombinations.Theresultsofoperationsofacquiredbusinessesare
includedinourconsolidatedfinancialstatementsprospectivelyfromthedateofacquisition.Thefairvalueofpurchaseconsiderationis
allocatedtotheassetsacquired,liabilitiesassumedandnon-controllinginterestsintheacquiredentitygenerallybasedontheirfair
valueattheacquisitiondate.Theexcessofthefairvalueofpurchaseconsiderationoverthefairvalueoftheassetsacquired,liabilities
assumedandnon-controllinginterestsintheacquiredentityisrecordedasgoodwill.Theprimaryitemsthatgenerategoodwillinclude
synergiesbetweentheacquiredbusinessandtheCompanyandtheacquiredassembledworkforce,neitherofwhichqualifiesfor
recognitionasanintangibleasset.Acquisition-relatedexpensesarerecognizedinourconsolidatedfinancialstatementsasincurred.
Goodwill
Goodwillrepresentstheexcessofthefairvalueofconsiderationgivenoverthefairvalueofthetangibleassets,identifiable
intangibleassetsandliabilitiesassumedinabusinesscombination.Wearerequiredtotestgoodwillforimpairmentannuallyand
whenevereventsorcircumstancesindicatethefairvalueofareportingunitmaybebelowitscarryingvalue.Goodwillisreviewedfor
impairmentannuallyonOctober1.Areportingunitistheoperatingsegmentorabusinessthatisonelevelbelowthatoperating
segment.Reportingunitsareaggregatedasasinglereportingunitiftheyhavesimilareconomiccharacteristics.Therewasno
impairmenttoourgoodwillrelatedtotheShipStationandShipWorksacquisitions.GoodwillrelatedtotheEndiciaacquisitionwillbe
testedbeginningonOctober1,2016.WedonotbelievethereisanyimpairmenttoourEndiciagoodwillasofDecember31,2015.
Trademarks, Patents and Intangible Assets
Acquiredtrademarks,patentsandotherintangiblesincludebothamortizableandnon-amortizableassetsandareincludedin
intangibleassets,netintheaccompanyingconsolidatedbalancesheets.Intangibleassetsarecarriedatcostlessaccumulated
amortization.Costassociatedwithinternallydevelopedintangibleassetsistypicallyexpensedasincurredasresearchanddevelopment
costs.Amortizationofamortizableintangibleassetsiscalculatedonastraight-linebasisovertheestimatedusefullivesoftheassets,
rangingfromapproximately4to17years.
Impairment of Long-Lived Assets and Intangible Assets
Long-livedassetsincludingintangibleassetswithfiniteusefullivesarereviewedforimpairmentwhenevereventsorchangesin
circumstancesindicatethatthecarryingamountofanassetmaynotberecoverable.Recoverabilityofassetstobeheldandusedis
measuredbyacomparisonofthecarryingamountofanassetto
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