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GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended
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Sep. 30, 2013
GOODWILL AND OTHER INTANGIBLE ASSETS [ABSTRACT] |
GOODWILL AND OTHER INTANGIBLE ASSETS | (5) GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill consisted of the following (amounts in thousands):
|  | December 31, 2012 |  | Acquisitions |  | Impairments |  | Deconsolidation of Subsidiary |  | Effect of Foreign Currency |  | September 30, 2013
Customer Management Services | $ | 20,288 |  | $ | - |  | $ | - |  | $ | - |  | $ | (307) |  | $ | 19,981
Customer Growth Services |  | 24,439 |  |  | 5,042 |  |  | - |  |  | - |  |  | - |  |  | 29,481
Customer Technology Services |  | 38,591 |  |  | 478 |  |  | - |  |  | - |  |  | 77 |  |  | 39,146
Customer Strategy Services |  | 11,361 |  |  | - |  |  | - |  |  | (1,274) |  |  | - |  |  | 10,087
| Total | $ | 94,679 |  | $ | 5,520 |  | $ | - |  | $ | (1,274) |  | $ | (230) |  | $ | 98,695
T he Company perform s a goodwill impairment test on at least an annual basis. The Company conducts its annual goodwill impairment assessment during the fourth quarter, or more frequently, if indicators of impairment exist. As of December 2012 and March 31, 2013, the Company had one reporting unit with goodwill of $7.3 million and a calculated fair value which exceeded its carrying value by 4%. During the three months ended June 30, 2013, the Company reorganized the reporting structure of the Customer Strategy Services segment, which is included in the above reporting unit, which necessitated an interim impairment analysis. T herefore, the Company tested the following assets of this reporting unit for impairment: indefinite-lived intangible assets, definite-lived long-lived assets and goodwill. There were no other indicators of impairment in any of the remaining reporting units as of June 30, 2013. The indefinite-lived intangible asset evaluated for impairment consisted of the PRG trade name. The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 6.0%, a discount rate specific to the trade name of 38.0% and a perpetuity growth rate of 7.0%. Based on th e calculated fair value of $5.3 million, the Company recorded impairment expense of $1.1 million in the three months ended June 30, 2013. Change s in the outcome of some or all of these assumptions may impact the calculated fair value of the trade name resulting in a different amount of impairment. Definite-lived long-lived assets consisted of fixed assets and an intangible asset related to the PRG customer relationships. The Company determined that the undiscounted future cash flows would be sufficient to cover the net book value all definite-lived long-lived assets. For the goodwill impairment analysis, the Company calculated the fair value of the PRG reporting unit and compared that to the updated carrying value after the above impairments were recorded and determined that the fair value was not in excess of its carrying value. Key assumptions used in the fair value calculation for goodwill impairment testing include, but were not limited to, a perpetuity growth rate of 7.0% based on the then current inflation rate combined with the GDP growth rate for the reporting unit's geographical region and a discount rate of 26.0%, which is equal to the reporting unit's equity risk premium adjusted for its size and company specific risk factors. Estimated future cash flows under the income approach were based on the Company's internal business plan excluding the results of the deconsolidated subsidiary and adjusted as appropriate for the Company's view of market participant assumptions. The current business plan assumes the occurrence of certain events, such as continued realignment of operations and reduction of general and administrative costs. Significant differences in the outcome of some or all of these assumptions could impact the calculated fair value of this reporting until resulting in a different outcome to goodwill impairment in a future period. Since the fair value of the reporting unit was not in excess of its carrying value, the Company calculated the implied fair value of goodwill and compared that value to the carrying value of goodwill. Implied fair value of goodwill is equal to the fair value of the reporting unit less the recorded value of any net assets and the fair value of intangible assets. Upon completing this assessment, the Company determined that the implied fair value of goodwill significantly exceeded the carrying value of goodwill by over 50%; therefore, there was no impairment of goodwill as of June 30, 2013. During the quarter ended September 30, 2013, the Company assessed whether any indicators of impairment existed for any of the reporting units and concluded there were none.

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