Amortization and Impairment Testing of IdentifiableIntangible Assets
During the year ended July 30, 2016, Cisco Systems, Inc.acquired the following identifiable intangible assets through itspurchase of two companies (in thousands):
| Limited Lives | Indefinite Lives |
|---|
| Technology | Customer Relationships | IPR&D |
|---|
Acquired Company (in thousands) | Useful life
(in years) | Amount | Useful life
(in years) | Amount | Amount |
|---|
| Lancope, Inc | 5 | $79,000 | 6 | $29,000 | $121,000 |
| Jasper Technologies, Inc | 6 | 240,000 | 7 | 75,000 | 23,000 |
Cisco acquired Lancope, Inc. in December 2015, and JasperTechnologies, Inc. in March 2016. Cisco separately testsidentifiable intangibles acquired from each company for impairment,and collects the following information to conduct impairment testsat the end of fiscal 2016 (in thousands):
| Technology | Customer Relationships | IPR&D |
|---|
Acquired Company (in thousands) | Sum of
expected
undiscounted
cash flows | Sum of
expected
discounted
cash flows | Sum of
expected
undiscounted
cash flows | Sum of
expected
discounted
cash flows | Sum of
expected
undiscounted
cash flows | Sum of
expected
discounted
cash flows |
|---|
| Lancope, Inc | $70,000 | $65,000 | $25,000 | $20,000 | $130,000 | $105,000 |
| Jasper Technologies, Inc | 200,000 | 150,000 | 80,000 | 65,000 | 30,000 | 26,000 |
Required
a. Calculate amortization expense for the above identifiableintangibles for fiscal 2016. Intangibles are amortized on astraight-line basis starting in the month followingacquisition.
- Round answers to the nearest whole number.
- Enter answers in thousands.
| Acquired Company | | Technology | Customer
Relationships |
|---|
| Lancope, Inc. | | $Answer | $Answer |
| Jasper Technologies, Inc. | | Answer | Answer |
b. Calculate impairment losses for fiscal 2016.
- Round answers to the nearest whole number.
- Enter answers in thousands.
| Acquired Company | | Technology | Customer
Relationships | IPR&D |
|---|
| Lancope, Inc. | | $Answer | $Answer | $Answer |
| Jasper Technologies, Inc. | | Answer | Answer | Answer |
c. Determine the amounts reported on Cisco’s fiscal 2016 balancesheet for technology, customer relationships, and in-processR&D.
- Round answers to the nearest whole number.
- Enter answers in thousands.
| Amounts reported on Cisco's fiscal 2016 balancesheet |
|---|
| Technology | | $Answer |
| Customer Relationships | | Answer |
| IPR&D | | Answer |
