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Note 5 - Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] | 5 . Goodwill and Other Intangible Assets Goodwill Goodwill represents the excess of purchase price over the fair value of tangible or identifiable intangible assets acquired and liabiliti es assumed in our acquisitions. The Company' s Goodwill balance is $21.0 million as of December 31, 2016, unchanged from December 31, 2015. The Company's goodwill relates 90% ($18.9 million) to its Domain Services operating segment and 10% ($2.1 million) to its Network Access Services operating segment. Goodwill is not amortized, but is subject to an annual impairment test. The Company performed an impairment analysis as outlined in note 2(g) and there were no indications of impairment in the 2016 and 2015 impairment tests. Other Intangible Assets: Intangible assets consist of acquired brand, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized, but are subject to impairment tests performed throughout the year. During 2016, we assessed that certain of the domain names that were originally acquired in the June 2006 acquisition of Mailbank.com Inc. that were up for renewal, should not be renewed. During the year ended December 31, 2016, domain names, with a book value of $42,673, were not renewed and were recorded as an impairment of indefinite life intangible assets. During the year ended December 31, 2015 domain names, with a book value of $206,116, were not renewed and were recorded as impairments of indefinite life intangible assets. Intangible assets, comprising brand, customer relationships and network rights are being amortized on a s traight-line basis over periods of four to fifteen years. On April 1, 2016, the Company acquired the international reseller channel from Melbourne IT Limited for consideration of $6.0 million, excluding legal and registry related transaction costs of $0. 2 million. The acquired assets were funded through a $6.0 million advance under the 2012 Demand Loan Facilities. These assets have been assigned to Customer Relationships and are being amortized over 7 years. In Fiscal 2016, the Company also completed four smaller domain related asset acquisitions, primarily domain hosting customer relationships, for a total consideration of $0.3 million. These assets have been assigned to Customer Relationships and are being amortized over 7 years. Acquired intangible assets consist of the following:
|  | Surname domain names |  |  | Direct navigation domain names |  |  | Brand |  |  | Customer relationships |  |  | Network rights |  |  | Total |
Amortization period |  | indefinite life |  |  | indefinite life |  |  | 7 years |  |  | 4 - 7 years |  |  | 15 years |  |  |  |  |
Balances, December 31, 2014 |  | $ | 11,525,624 |  |  | $ | 1,941,231 |  |  | $ | 110,510 |  |  | $ | 625,220 |  |  | $ | - |  |  | $ | 14,202,585 |
Acquisition of Ting Virginia, LLC (note 3) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 68,000 |  |  |  | 692,000 |  |  |  | 760,000 |
Additions to/(disposals from) domain portfolio, net |  |  | (6,815 | ) |  |  | (17,251 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (24,066 | )
Impairment of indefinite life intangible assets |  |  | (179,454 | ) |  |  | (26,662 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (206,116 | )
Amortization expense |  |  | - |  |  |  | - |  |  |  | (30,840 | ) |  |  | (193,366 | ) |  |  | (38,520 | ) |  |  | (262,726 | )
Balances, December 31, 2015 |  | $ | 11,339,355 |  |  | $ | 1,897,318 |  |  | $ | 79,670 |  |  | $ | 499,854 |  |  | $ | 653,480 |  |  |  | 14,469,677 |
|  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Acquisition of customer relationships |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,529,654 |  |  |  | - |  |  |  | 6,529,654 |
Additions to/(disposals from) domain portfolio, net |  |  | (6,166 | ) |  |  | (23,525 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (29,691 | )
Impairment of indefinite life intangible assets |  |  | (37,968 | ) |  |  | (4,705 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (42,673 | )
Amortization expense |  |  | - |  |  |  | - |  |  |  | (74,460 | ) |  |  | (830,697 | ) |  |  | (48,017 | ) |  |  | (953,174 | )
Balances, December 31, 2016 |  | $ | 11,295,221 |  |  | $ | 1,869,088 |  |  | $ | 5,210 |  |  | $ | 6,198,811 |  |  | $ | 605,463 |  |  | $ | 19,973,793 |
The following table shows the estimated amortization expense for each of the next 5 years, assuming no further additions to acquired intangible assets are made:
|  | Year ending December 31, |
201 7 |  | $ | 1,181,294 |
201 8 |  |  | 1,128,114 |
201 9 |  |  | 978,936 |
20 20 |  |  | 978,936 |
202 1 |  |  | 978,936 |
Thereafter |  |  | 1,563,268 |
Total |  | $ | 6,809,484 |

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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 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16373-109275 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=66006027&loc=d3e16265-109275 Reference 3: 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=66006027&loc=d3e16323-109275 Reference 4: 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=35741047&loc=d3e13816-109267 Reference 5: 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=35741047&loc=d3e13854-109267 + Details
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