| INTANGIBLE ASSETS |
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During the year ended December 31, 2010, the Group assessed certain indicators of impairment
impacting the King of Kings 3 (“KOK 3 game software”) game’s revenue and cash flow forecasts
which were primarily attributed to increasing competition coupled with declines in customer
demand (Note 2 (27) Business and economic risk). The Group tested the KOK3 game software for
impairment using an income approach, which involves applying an appropriate discount rate to
estimated cash flow forecasts. Based on the Company’s analysis, the Company recorded
an impairment charge of approximately RMB46,557,669 (US$7,054,192), for the year ended December
31, 2010, which is included in the line “Impairment of intangible assets” in the consolidated
statements of operations and comprehensive income. There were no indicators of impairment noted
related to the intangible assets during the year ended December 31, 2009. |
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The following table presents the Company’s intangible assets as of the respective balance sheet
dates: |
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As of December 31, 2010 |
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Accumulated |
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Deconsolidation of |
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Net Carrying |
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Gross Carrying Value |
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Amortization |
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Impairment |
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a subsidiary (Note 5) |
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Net Carrying Value |
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Value |
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(RMB) |
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(RMB) |
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(RMB) |
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(RMB) |
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(RMB) |
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(US$) |
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Online game product
development costs
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28,745,846 |
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(10,074,220 |
) |
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— |
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— |
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18,671,626 |
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2,829,034 |
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Purchased software
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50,575,054 |
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(36,775,426 |
) |
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— |
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— |
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13,799,628 |
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2,090,853 |
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Acquired software
from acquisition of
subsidiaries
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1,624,891 |
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(141,429 |
) |
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— |
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— |
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1,483,462 |
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224,767 |
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KOK 3 game software
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80,073,005 |
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(8,515,336 |
) |
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(46,557,669 |
) |
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(25,000,000 |
) |
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— |
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— |
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Intangible assets, net
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161,018,796 |
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(55,506,411 |
) |
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(46,557,669 |
) |
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(25,000,000 |
) |
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33,954,716 |
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5,144,654 |
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As of December 31, 2009 |
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Accumulated |
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Gross Carrying Value |
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Amortization |
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Net Carrying Value |
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(RMB) |
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(RMB) |
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(RMB) |
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Online game product
development costs
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19,924,142 |
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(6,746,615 |
) |
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13,177,527 |
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Purchased software
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45,421,880 |
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(18,840,946 |
) |
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26,580,934 |
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Acquired software
from acquisition of a
subsidiary
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478,862 |
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— |
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478,862 |
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KOK 3 game software
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78,090,967 |
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— |
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78,090,967 |
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Intangible assets, net
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143,915,851 |
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(25,587,561 |
) |
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118,328,290 |
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Amortization expenses for the years ended December 31, 2008, 2009 and 2010 were
RMB8,120,619, RMB15,123,412 and RMB29,918,850 (US$4,533,159) respectively. |
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The estimated annual amortization expense for each of the five succeeding fiscal years is as
follows: |
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Amortization |
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(RMB) |
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(US$) |
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For the years ending December 31,
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2011
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16,130,261 |
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2,443,979 |
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2012
|
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8,049,570 |
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1,219,632 |
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2013
|
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5,594,130 |
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847,595 |
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2014
|
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3,339,750 |
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506,023 |
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2015
|
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493,461 |
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74,767 |
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