12.

Goodwill

	Amount
	US$(’000)

Balance as of January 1, 2017		4,970
Exchange translation adjustment		307
Balance as of December 31, 2017		5,277
Impairment on goodwill		(5,024	)
Exchange translation adjustment		(253	)
Balance as of December 31, 2018		-

As of

December 31, 2018

and

2017,

the Company’s goodwill was attributable to its internet advertising and data service reporting unit. The Company performs impairment test on goodwill at least on an annual basis, and between annual tests when an event occurs, or circumstances change that could indicate that the asset might be impaired. 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

(p) for significant unobservable internally-developed inputs used in the fair value measurement).

Due to significant decrease in overall gross profit margin and continued operating losses incurred from the Company’s internet advertising and data services reporting unit, the Company performed interim goodwill impairment test on

June 30, 2018.

In accordance with ASU

2017

04,

which the Company has adopted on

January 1, 2018,

by comparing the fair value of the reporting unit, which was approximately

US$1.0

million, with its carrying amount, including goodwill, which was approximately

US$6.2

million, the Company recognized an approximately

US$5.2

million full impairment on its goodwill for the year ended

December 31, 2018

due to insufficient estimated future cash flows expected to be generated by the reporting unit. For the years ended

December 31, 2017,

the Company did

not

record any impairment loss associated with its goodwill.