XML 68 R24.htm IDEA: XBRL DOCUMENT v2.4.0.8
Goodwill Impairment
12 Months Ended
Dec. 31, 2013
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill Impairment

18. Goodwill Impairment

Goodwill is accounted for in accordance with ASC Topic 350 and is assigned to reporting units based on where the related acquired net assets are assigned and based on management’s expectations about which reporting units will benefit from the synergies of the acquired business. Goodwill is tested for impairment when events and circumstances warrant and at least annually. An impairment loss is recognized if the carrying amount of an asset or reporting unit exceeds its fair value. We primarily employ two methodologies for determining the fair value of a long-lived asset: (i) the amount at which the asset could be bought or sold in a current transaction between willing parties; or (ii) the present value of expected future cash flows grouped at the lowest level for which there are identifiable independent cash flows.

During 2012, we recognized $17,636,569 of goodwill impairment based on our goodwill impairment testing. We determined that due to capital constraints, we curtailed the planned expansion of YouChange, and we were not able to quantify with any certainty the future cash flows and therefore the fair value of the reporting unit as of December 31, 2012 resulting in a full impairment of the goodwill.

For the year ending December 31, 2013, we recognized $26,850,039 of goodwill impairment based on our goodwill impairment testing. We determined that the carrying amount of the reporting unit exceeded the fair value and recorded a goodwill impairment charge. In connection with the acquisition that gave rise to the goodwill, we recorded in 2013 a $23,449,372 gain on our equity method based investment in Quest. The impact of the goodwill impairment and the gain on investment is a net expense of $3,400,667 included in the operating loss for the year ended December 31, 2013.