Interpace Biosciences®, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]


7.	Goodwill and Other Intangible Assets

Goodwill and indefinite and finite-lived intangible assets recorded as of December 31, 2011 is attributable to the 2010 acquisition of Group DCA. Goodwill and finite-lived intangible assets recorded as of December 31, 2010 are attributable to the 2010 acquisition of Group DCA and the 2004 acquisition of Pharmakon. As of December 31, 2011, the carrying amount of goodwill for the Group DCA business unit was $18.9 million. As of December 31, 2010, the carrying amounts of goodwill for the Group DCA business unit was $18.9 million and Pharmakon reporting unit was $5.1 million. During the year ended December 31, 2011, the Company sold certain assets of its Pharmakon business unit and exited the business. As a result of this transaction, the Company wrote-off Pharmakon's goodwill and finite-lived intangible assets during the year ended December 31, 2011. See Note 18, Discontinued Operations, for additional information.

Goodwill

During the Company’s annual goodwill impairment test performed as of December 31, 2011, management determined that the fair value of the Group DCA reporting unit exceeded its carrying value, including goodwill, and thus concluded that the Group DCA goodwill was not considered impaired. As of December 31, 2011, Group DCA’s fair value exceeded its carrying value by approximately $13.0 million, or 47%. If, in future periods, the Group DCA reporting unit's projected long-term sales growth rate, profit margins, or terminal rate change adversely, or the assumed weighted-average cost of capital is considerably higher, future testing may indicate impairment of the goodwill and, as a result, require an adjustment to reduce or write off the carrying value of Group DCA’s goodwill.

Other Intangible Assets

In 2010 the Company recorded approximately $8.4 million in other intangible assets related to its acquisition of Group DCA. This balance was comprised of technology of $4.1 million, the Healthcare Professionals database of $2.2 million and the corporate tradename of $2.1 million. See Note 3, Acquisition, for further information. As of December 31, 2011, the fair value of Group DCA’s corporate tradename exceeded its carrying value. If, in future periods, Group DCA reporting unit’s projected long-term sales growth rate or terminal rate change adversely, or the assumed discount rate is considerably higher, future testing may indicate impairment of the corporate tradename and, as a result, require an adjustment to reduce or write off the carrying value of Group DCA’s corporate tradename.



		As of December 31, 2011						As of December 31, 2010
	Life (Years)	Carrying Amount		Accumulated Amortization		Net		Carrying Amount		Accumulated Amortization		Net
Pharmakon*
Customer relationships	7	$	—	$	—	$	—	$	1,751	$	250	$	1,501
Corporate tradename	7	—		—		—		791		113		678
Group DCA
Technology	6	4,097		797		3,300		4,097		113		3,984
Healthcare professional database	10	2,203		257		1,946		2,203		36		2,167
Corporate tradename	N/A	2,063		—		2,063		2,063		—		2,063
Total		$	8,363	$	1,054	$	7,309	$	10,905	$	512	$	10,393

* On December 29, 2011, the Company entered into an agreement to sell certain assets of its Pharmakon reporting unit. See Note18, Discontinued Operations, for additional details related to the Pharmakon asset sale.

Amortization expense related to continuing operations was approximately $0.9 million and $0.1 million for the years ended December 31, 2011 and December 31, 2010, respectively. Estimated amortization expense for the next five years is as follows:



2012	2013	2014	2015	2016
$905	$905	$905	$905	$754

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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