4. GOODWILL

Changes in goodwill for the six months ended June 30, 2012 are as follows:


	North America			EU		Russia			Other			Total
Balance as of January 1, 2012
Goodwill	$	2,286		$	2,864	$	3,019		$	1,697		$	9,866
Accumulated impairment losses		—			—		—			(1,697	)		(1,697	)

		2,286			2,864		3,019			—			8,169

Acquisition of Thoughtcorp, Inc. (Note 3).		4,383			—		—			—			4,383
Effect of net foreign currency exchange rate changes		(31	)		—		(85	)		—			(116	)

Balance as of June 30, 2012
Goodwill		6,638			2,864		2,934			1,697			14,133
Accumulated impairment losses		—			—		—			(1,697	)		(1,697	)

	$	6,638		$	2,864	$	2,934			—		$	12,436

As part of the Thoughtcorp acquisition, substantially all of the employees of the acquiree accepted employment with the Company. The Company believes the amount of goodwill resulting from the allocation of purchase price to acquire Thoughtcorp is attributable to the workforce of the acquired business. All of the goodwill was allocated to the Company’s Canadian operations and is presented within North America.

The Company values goodwill at fair value on a non-recurring basis. When testing for impairment, the Company first compares the fair value of its reporting units to the recorded values. Valuation methods used to determine fair value are based on the analysis of the discounted future cash flows that a reporting unit is expected to generate (“Income Approach”). These valuations are considered Level 3 measurements under FASB ASC Topic 820. The Company utilizes estimates to determine the fair value of the reporting units such as future cash flows, growth rates, capital requirements, effective tax rates and projected margins, among other factors. Estimates utilized in the future evaluations of goodwill for impairment could differ from estimates used in the current period calculations. If the carrying amount of the reporting units exceeds its fair value, goodwill is considered potentially impaired and a second step is performed to measure the amount of impairment loss.

As a result of an operating loss in the Other reporting unit for the three months ended June 30, 2011, the Company performed a goodwill impairment test. In assessing impairment in accordance with Accounting Standards Codification, (“ASC”) No. 350, “Intangibles-Goodwill and Other,” the Company determined that the fair value of the Other reporting unit, based on the total of the expected future discounted cash flows directly related to the reporting unit, was below the carrying value of the reporting unit. The Company completed the second step of the goodwill impairment test, resulting in an impairment charge of $1,697. The Company completed its annual impairment testing in the fourth quarter of fiscal 2011 and found no indication of goodwill impairment for its North America, EU, or Russia reporting units.