Note 13 - Goodwill

12 Months Ended

Dec. 31, 2015

Disclosure Text Block Supplement [Abstract]

Goodwill Disclosure [Text Block]

13. Goodwill

	Amount
	US$(’000)
Balance as of December 31, 2013		11,450
Goodwill impairment losses		(4,668	)
Exchange translation adjustment		(10	)
Balance as of December 31, 2014		6,772
Goodwill impairment losses		(1,071	)
Goodwill allocated to disposal group classified as held for sale		(914	)
Exchange translation adjustment		(391	)
Balance as of December 31, 2015		4,396

The Company’s goodwill arose as a result of various business combinations consummated in 2011. The Company’s respective goodwill is directly attributable to its internet advertising reporting unit and brand management and sales channel building reporting unit. 

As discussed in Note 2, the Company exited its brand management and sales channel building business segment, as a result, the Company provided full impairment provision against the remaining carrying value of goodwill attributable to this reporting unit, with a loss of approximately US$1,117,000 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$900,000 of impairment loss associated with goodwill of this reporting unit, which was reclassified and included in loss from discontinued operation for the year ended December 31, 2014, accordingly.

As of December 31, 2015, as discussed in Note 3(m), based on the relative fair value of liansuo.com, the disposal group classified as held for sale during the period and the portion of the internet advertising reporting unit that will be retained, the Company first allocated approximately US$941,000 carrying value of goodwill attributable to its internet advertising reporting unit to the disposal group. The Company then performed annual impairment test on goodwill remaining in the portion of the reporting unit to be retained using its adjusted carrying amount in accordance with ASC Topic 350 “Intangibles-Goodwill and Others”. The fair value of reporting units was determined using the income approach by a discounted cash flow analysis. The discounted cash flow method is premised on the concept that the value is based on the present value of all future cash flows by applying an appropriate discount rate. The future benefits generating cash flows consist of current income distributions, appreciation in the asset, or a combination of both. In essence, this valuation method requires a forecast to be made of cash flow, going out far enough into the future until an assumed stabilization occurs for the assets being appraised. This methodology assumes that the forecasted income/cash flow will not necessarily be stable in the near term but will stabilize in the future (See Note 3 (q) for significant unobservable internally-developed inputs used in the fair value measurement).

For the year ended December 31, 2015, the Company did not recognize any further goodwill impairment loss attributable to internet advertising reporting unit. For the years ended December 31, 2014, the Company recorded US$3,751,000 impairment losses associated with goodwill attributable to this reporting unit.