INTANGIBLE ASSETS AND GOODWILL

3 Months Ended

Oct. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 4 - INTANGIBLE ASSETS AND GOODWILL

The Company recorded intangible assets, consisting of membership lists, noncompetition agreements and a trade name, in connection with business combinations and membership list purchases completed in fiscal years from 2005 to 2011. Changes in the carrying amount of the intangible assets in the three-months ended October 31, 2011 are summarized as follows (in thousands):

	Membership Lists			Non-Compete Agreements			Trade Name		Total Intangible Assets
Balance as of July 31, 2011	$	818		$	23		$	14	$	855

Amortization		(68	)		(2	)		-		(70	)
Balance as of October 31, 2011	$	750		$	21		$	14	$	785

Based on identified intangible assets recorded as of October 31, 2011 and assuming no subsequent impairment of the underlying assets, amortization expense is expected to be as follows (in thousands):

Year ending July 31,	Membership List Amortization		Noncompetition Agreement Amortization		Trade Name Amortization		Total Amortization

2012(1)		203		6		2		211
2013		271		8		2		281
2014		99		7		2		108
2015		63				2		65
Thereafter		114		-		6		120
Total	$	750	$	21	$	14	$	785

(1)	The expected amortization for 2012 reflects amortization expense that the Company anticipates to be recognized in the nine-month period from November 1, 2011 to July 31, 2012.

The Company recorded goodwill in connection with business combinations completed in fiscal years from 2005 to 2009. The acquisitions made in 2005 and in 2008 included contingent consideration recorded as additions to goodwill in subsequent periods, as the final settlement amounts became determinable.

On October 2009 and May 2011, ITEX sold assets originally acquired in the 2007 Intagio acquisition. As part of the sales, ITEX allocated a pro rata portion of the membership list to the sale in the amount of $76 and $6, respectively. The pro rata percentage amount of unamortized membership list was calculated using the amount of the sold corporate-owned office member transaction volume over the total transaction volume of the retained members acquired in the original purchase transaction.

In October 2010, ITEX purchased a trade exchange membership list from a third-party in the amount of $72. This list will be amortized over a 60 month period.

On May 1, 2011, ITEX acquired certain assets of a commercial trade exchange network from an Oregon corporation for a cash payment of $400. Included in the assets was a non-compete agreement, accounts receivable and a membership list of approximately 1,500 member businesses, concentrated primarily in the states of Washington, Oregon, Utah and Georgia. ITEX added new brokers to service these acquired accounts and established a corporate-owned office in Milwaukie, Oregon.

In September 2011, ITEX purchased a trade exchange membership list from a third-party in the amount of $175. This entire list was then immediately sold to an existing Broker for $175, resulting in no additional membership list asset on ITEX’s financial statement.

There was no change in the carrying amount of Goodwill in the three-months ended October 31, 2011. The balance of Goodwill was $3,282 at October 31, 2011.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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