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5. SOFTWARE DEVELOPMENT COSTS
 9 Months Ended
Sep. 30, 2012
Software Development Costs  
Note 5. SOFTWARE DEVELOPMENT COSTS

 

The Company capitalizes costs related to the development of certain of its software products in accordance with ASC No. 350, Intangibles – Goodwill and Other. Amortization expense relating to capitalized software development costs totaled $162,000 and $137,000 for the three months ended September 30, 2012 and 2011, respectively, and $492,000 and $437,000 for the nine months ended September 30, 2012 and 2011, respectively. As of September 30, 2012 and December 31, 2011, approximately $977,000 and $462,000, respectively, of capitalized software costs were not subject to amortization as the development of various software projects was not complete.

 

The Company performed its quarterly reviews of software development projects for the three and nine months ended September 30, 2012, and determined to abandon various software development projects that it concluded were no longer a current strategic fit or for which the Company determined that the marketability of the content had decreased due to obtaining additional information regarding the specific purpose for which the content was intended. There was no impairment loss related to these projects, as the assets were fully depreciated and had no net book value. Impairment losses of $18,000 and $155,000 were recognized for the three and nine months ended September 30, 2011 and are included in selling, general and administrative expenses.