Tucows 2014 Annual Report Download - page 99

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AMORTIZATION OF INTANGIBLE ASSETS
Year ended December 31,
2013 2012
Amortization of intangible assets $ 876,120 $ 876,120
Decrease over prior period $-
Decrease - percentage -%
Percentage of net revenues 1%1%
Amortization of intangible assets consists of amounts arising in connection with the acquisition of Innerwise,
Inc. in July 2007 and the acquisition of EPAG in August 2011.
The brand and customer relationships acquired in connection with the acquisitions of Innerwise Inc. and EPAG
are being amortized on a straight-line basis over seven years.
Technology acquired in connection with the acquisition of EPAG is amortized on a straight-line basis over two
years.
LOSS (GAIN) ON CURRENCY FORWARD CONTRACTS
Although our functional currency is the U.S. dollar, a major portion of our fixed expenses are incurred in
Canadian dollars. Our goal with regard to foreign currency exposure is, to the extent possible; to achieve operational cost
certainty, manage financial exposure to certain foreign exchange fluctuations and to neutralize some of the impact of
foreign currency exchange movements. Accordingly, we enter into foreign exchange contracts to mitigate the exchange
rate risk on portions of our Canadian dollar exposure.
Year ended December 31,
2013 2012
Loss (gain) on currency forward contracts $ 676,120 $ (682,851)
Increase over prior period $ 1,358,971
Increase - percentage (199)%
Percentage of net revenues 1%(1)%
We have entered into certain forward exchange contracts that do not comply with the requirements of hedge
accounting to meet a portion of our future Canadian dollar requirements through December 2014. The impact of the fair
value adjustment on outstanding contracts for Fiscal 2013 was a net loss of $0.5 million, compared to a net gain of $1.1
million for Fiscal 2012. The impact of the fair value adjustment on outstanding contracts was increased by a realized loss
upon settlement of currency forward contracts of $0.2 million for Fiscal 2013 and partially offset by a realized loss of
$0.4 million for Fiscal 2012.
At December 31, 2013, our balance sheet reflects a derivative instrument liability of $0.5 million as a result of
our existing foreign exchange contracts. Until their respective maturity dates, these contracts will fluctuate in value in line
with movements in the Canadian dollar relative to the U.S. dollar.
OTHER INCOME AND EXPENSES
Year ended December 31,
2013 2012
Other income (expense), net $ (354,857)$ 336,848
Decrease over prior period $ (691,705)
Decrease - percentage (205)%
Percentage of net revenues (0)% 0%
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