GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2011

GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

12.

GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

Goodwill is comprised of the following:

	For the Years Ended December 31,
	2009		2010		2011			2011
	RMB		RMB		RMB			US$

Balance at beginning of year		300,163		300,163		300,163			47,691
Less: impairment charge		-		-		(300,163	)		(47,691	)

Balance at end of year		300,163		300,163		-			-

In accordance with ASC 350, the Group is considered to be a single reporting unit. The Group assessed the fair value of the reporting unit as of December 31, 2011 by reference to the closing price of its publicly traded ADS on that date as well as an assumed control premium. Due to the decline of the price of the ADS during the year ended December 31, 2011, the assessed fair value was below the carrying value of the reporting unit as of year end. The Group then performed a hypothetical purchase allocation using the fair value of the reporting unit and determined that the goodwill was fully impaired. As a result, the Group recognized a goodwill impairment charge of RMB300,163 (US$47,691) for the year ended December 31, 2011 under the caption of “Asset impairment” in the consolidated statement of operations.

For the year ended December 31, 2011, the Company recorded impairment on goodwill, property, plant, and equipment, deposits for non-current assets and other current assets amounting to RMB300,163 (US$47,691), RMB3,179 (US$505), RMB20,679 (US$3,286) and RMB9,913 (US$1,575), respectively. For the year ended December 31, 2010, the Company recorded impairment on deposits for non-current assets and other current assets amounting to RMB2,513 and RMB706, respectively. The total amount of impairment charge of RMB333,934 (US$53,057) (2010: RMB3,219) is included in the caption of “Asset impairment” in the consolidated statements of operations.

Acquired intangible assets consist of the following:

	Customer relationship intangibles			Operating lease intangibles			Total
	RMB			RMB			RMB

Intangible assets, net:
At January 1, 2010		144,117			11,228			155,345
Acquisition of a subsidiary – TKM (note 4)		22,579			-			22,579
Disposal		(5,323	)		-			(5,323	)
Amortization expenses		(24,383	)		(2,105	)		(26,488	)
Intangible assets, net
At December 31, 2010 and January 1, 2011		136,990			9,123			146,113
Acquisition of a business – CD hospital (note 4)		7,963			-			7,963
Amortization expenses		(23,309	)		(1,749	)		(25,058	)
Intangible assets, net
At December 31, 2011		121,644			7,374			129,018
Intangible assets, net
At December 31, 2011, in US$		19,327			1,172			20,499

At December 31, 2011:
Intangible assets, cost		214,478			15,078			229,556
Less: accumulated amortization		(92,834	)		(7,704	)		(100,538	)

		121,644			7,374			129,018

Acquired intangible amortization expenses were approximately RMB26,493, RMB26,488 and RMB25,058 (US$3,981) for the years ended December 31, 2009, 2010 and 2011, respectively. The estimated annual amortization expenses for the above intangible assets for each of the five succeeding years are as follows:

	Amortization
	RMB		US$

2012		25,146		3,995
2013		22,503		3,575
2014		19,866		3,156
2015		18,170		2,887
2016		12,777		2,030

		98,462		15,643

- 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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