Note 11 - Intangible Assets, Net

12 Months Ended

Dec. 31, 2015

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

11. Intangible assets, net

	As of December 31,
	2015			2014
	US$(’000)			US$(’000)
Intangible assets not subject to amortization:
Domain name		1,488			1,579
Intangible assets subject to amortization:
Contract backlog		191			202
Customer relationship		3,340			3,545
Non-compete agreements		1,321			1,402
Software technologies		316			335
Cloud compute software technology		1,429			1,517
SMEs intelligent operation and marketing data service applications		4,973			5,277
Other computer software		108			78
Intangible assets, cost		13,166			13,935
Less: accumulated amortization		(4,845	)		(3,704	)
Less: accumulated impairment losses		(2,683	)		(993	)
Intangible assets, net		5,638			9,238

Amortization expenses in aggregate for the years ended December 31, 2015 and 2014 were approximately US$1,413,000 and US$1,052,000, respectively.

As discussed in Note 2, the Company exited its brand management and sales channel building business segment, as a result, the Company reduced the remaining carrying value of customer relationship of this business segment to zero, with a loss of approximately US$169,000 recorded in loss from discontinued operation for the year ended December 31, 2015. For the year ended December 31, 2014, the Company recorded approximately US$547,000 of impairment loss for customer relationship and non-compete agreement of this business segment, which was reclassified and included in loss from discontinued operation for the year ended December 31, 2014, accordingly.

As part of the internet advertising and marketing services restructuring, the Company ceased to use its domain name, www.sooe.cn acquired in 2011, which was primarily designed to serve smaller and home office clients. The Company would concentrate its resources and focus on providing comprehensive, integrated and in-depth services to more matured and well-established SME clients. As a result, the Company reduced the remaining carrying value of the domain name to zero, with a loss of approximately US$1,551,000 recorded and included in loss from continued operations for the year ended December 31, 2015.

As discussed in Note 3 (q), the Company performed an impairment analysis on its intangible assets as of December 31, 2015 and 2014. The fair value of intangible assets was determined using Multi-period Excess Earning Method (the “MEEM method”). As an application of income approach, the MEEM method is a widely used valuation method. It determines the fair value of the asset as the present value of the cash flows attributable to it. As the asset will generally earn cash flows through interaction with other tangible and intangible assets, the contributions to cash flows of those other assets must be removed. Those assets are referred to as contributory assets which are defined as all assets that are utilized in the realization of expected future cash flows for the target asset (See Note 3 (q) for significant unobservable internally-developed inputs used in the fair value measurement).

For the years ended December 31, 2015 and 2014, the Company provided approximately US$101,000 and US$442,000 impairment losses, which were associated with customer relationship and non-compete agreements of its internet advertising business segment.

Based on the net carrying value of the finite-lived intangible assets recorded, which weighted average remaining useful life was 6.28 years as of December 31, 2015, and assuming no further subsequent impairment of the underlying intangible assets, the estimated future amortization expenses is approximately US$1,238,000 for the year ended December 31, 2016 and approximately US$765,000 each year for the year ended December 31, 2017 through 2020.