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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2011
GOODWILL AND INTANGIBLE ASSETS |
8. | GOODWILL AND INTANGIBLE ASSETS
Goodwill The changes in the carrying amount of goodwill are as follows:
|  | 2010 |  |  | 2011 |  |  | 2011 |
|  | RMB |  |  | RMB |  |  | US$ |
|  | (In thousands) |
Balance as of January 1 |  |  | 63,691 |  |  |  | 63,686 |  |  |  | 10,119 |
Goodwill acquired |  |  | — |  |  |  | 2,468,874 |  |  |  | 392,265 |
Impairment losses |  |  | — |  |  |  | (113,011 | ) |  |  | (17,956 | )
Foreign currency translation adjustment |  |  | (5 | ) |  |  | (7 | ) |  |  | (1 | )
Balance as of December 31 |  |  | 63,686 |  |  |  | 2,419,542 |  |  |  | 384,427 |
The impairment loss was related to goodwill resulting from an insignificant business combination made in 2011, the underlying business of which was never integrated into the Company’s business after its acquisition. Due to a significant decline in the popularity and performance of the acquired business and failure to achieve its expected market share, the Company plans to abandon this acquired business, although certain assets were still in limited use as at December 31, 2011. Hence, an impairment charge was made for the entire amount of goodwill relating to the business acquired. Intangible assets Finite-lived intangible assets
|  | As of December 31, 2010 |
|  | Gross carrying value |  |  | Accumulated amortization |  |  | Net carrying value |
|  | RMB |  |  | RMB |  |  | RMB |
|  |  |  |  | (In thousands) |  |  |  |
Land use right |  |  | 97,611 |  |  |  | (6,995 | ) |  |  | 90,616 |
Customer relationships |  |  | 31,408 |  |  |  | (26,870 | ) |  |  | 4,538 |
Software |  |  | 12,131 |  |  |  | (3,572 | ) |  |  | 8,559 |
Trademark |  |  | 1,727 |  |  |  | (248 | ) |  |  | 1,479 |
Others |  |  | 16,313 |  |  |  | (16,117 | ) |  |  | 196 |
|  |  | 159,190 |  |  |  | (53,802 | ) |  |  | 105,388 |
|  | As of December 31, 2011 |
|  | Gross carrying value |  |  | Accumulated amortization |  |  | Impairment loss |  |  | Net carrying value |  |  | Net carrying value |
|  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | US$ |
|  |  |  |  | (In thousands) |  |  |  |
Land use right |  |  | 223,309 |  |  |  | (11,252 | ) |  |  | — |  |  |  | 212,057 |  |  |  | 33,692 |
Customer relationships |  |  | 254,169 |  |  |  | (40,168 | ) |  |  | (1,031 | ) |  |  | 212,970 |  |  |  | 33,838 |
Software |  |  | 44,350 |  |  |  | (7,465 | ) |  |  | (3,424 | ) |  |  | 33,461 |  |  |  | 5,316 |
Trademarks |  |  | 320,527 |  |  |  | (14,567 | ) |  |  | — |  |  |  | 305,960 |  |  |  | 48,612 |
User list |  |  | 158,070 |  |  |  | (23,418 | ) |  |  | — |  |  |  | 134,652 |  |  |  | 21,394 |
Others |  |  | 37,183 |  |  |  | (19,097 | ) |  |  | (1,085 | ) |  |  | 17,001 |  |  |  | 2,702 |
|  |  | 1,037,608 |  |  |  | (115,967 | ) |  |  | (5,540 | ) |  |  | 916,101 |  |  |  | 145,554 |
Amortization expense for the years ended December 31, 2009, 2010 and 2011 was RMB10.73 million, RMB10.25 million and RMB65.67 million (US$10.43 million), respectively. Estimated amortization expense relating to the existing intangible assets with finite lives for each of next five years is as follows:
|  | RMB |  |  | US$ |
|  | (In thousands) |
For the years ending December 31, |  |  |  |  |  |  |  |
2012 |  |  | 126,945 |  |  |  | 20,170 |
2013 |  |  | 124,493 |  |  |  | 19,780 |
2014 |  |  | 97,352 |  |  |  | 15,468 |
2015 |  |  | 64,452 |  |  |  | 10,240 |
2016 |  |  | 62,463 |  |  |  | 9,924 |
The impairment losses are related to intangible assets acquired from an acquired business in 2011, which the Company plans to abandon as of December 31, 2011. Those impairment losses are included in the line item entitled “Other income, net”. Indefinite-lived intangible assets
|  | December 31, |
|  | 2010 |  |  | 2011 |  |  | 2011 |
|  | RMB |  |  | RMB |  |  | US$ |
|  | (In thousands) |
Domain name |  |  | 9,360 |  |  |  | 9,360 |  |  |  | 1,487 |
Trademarks |  |  | 1,050 |  |  |  | 3,550 |  |  |  | 564 |
License |  |  | — |  |  |  | 2,000 |  |  |  | 318 |
|  |  | 10,410 |  |  |  | 14,910 |  |  |  | 2,369 |
Impairment loss |  |  | — |  |  |  | (2,500 | ) |  |  | (397 | )
|  |  | 10,410 |  |  |  | 12,410 |  |  |  | 1,972 |
The Company’s indefinite-lived intangible assets include the Company’s trademark of “BAIDU”, one domain name asset, an internet publishing license and other trademarks acquired from business combinations. The domain name asset was acquired in July 2006 and the useful life is indefinite; the Company’s trademark of “BAIDU” qualified as a China well-known trademark by the State Trademark Office in March 2008. The registration costs were recorded as an intangible asset with indefinite useful life. The impairment loss is related to trademarks acquired from an acquired business in 2011 which the Company plans to abandon as of December 31, 2011. The impairment loss is included in the line item entitled “Other income, net”.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6905597&loc=d3e13816-109267 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16323-109275 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6905597&loc=d3e13854-109267 + Details
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