Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Other Intangible Assets [Abstract]

(3) Goodwill and Other Intangible Assets

Goodwill

Goodwill is our primary intangible asset not subject to amortization. The changes in carrying amount in the years ended December 31, 2013 and 2012 was as follows:

	Total		Merge Healthcare		Merge DNA

Balance at December 31, 2011	$	209,829	$	-	$	-
Increase due to acquisitions		4,431		-		-
Allocation to operating segments		-		194,115		20,145
Increase due to foreign currency		52		-		52
Balance at December 31, 2012		214,312		194,115		20,197
Increase due to foreign currency		62		-		62
Balance at December 31, 2013	$	214,374	$	194,115	$	20,259

Other Intangible Assets

Our intangible assets subject to amortization are summarized as of December 31, 2013 and 2012 as follows:

			December 31, 2013				December 31, 2012
	Weighted Average Remaining Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Purchased software		3.8	$	31,542	$	16,885	$	31,066	$	12,350
Capitalized software		2.5		1,910		1,685		1,825		1,534
Customer relationships		5.3		46,333		22,740		46,302		15,012
Backlog		1.0		9,680		9,448		9,680		8,338
Trade names		6.9		1,463		605		1,463		446
Non-competes		3.3		3,190		1,673		3,190		1,211
Total			$	94,118	$	53,036	$	93,526	$	38,891

As a result of an insignificant acquisition in the twelve months ended December 31, 2012, we increased the gross carrying amounts of purchased software, customer relationships, and trade names by $780, $1,220, and $80, respectively. Upon completion of a product rationalization and a product being rebranded in the fourth quarter of 2012, we recorded a $796 impairment charge to purchased software and a $474 impairment charge to trade names. We also wrote off the fully amortized gross carrying amounts and the accumulated amortization related to the purchased software and trade name of $1,110 and $620, respectively, in 2012.

Estimated aggregate amortization expense for our intangible assets, which become fully amortized in 2022, for the remaining periods is as follows:

For the year ending December 31:	2014		12,378
2015			9,864
2016			7,819
2017			5,637
2018			3,402
Thereafter			1,982
Total		$	41,082

Amortization expense, including impairments for our intangible assets, is set forth in the following table:

	Year Ended December 31,
	2013		2012		2011

Amortization included in cost of sales:
Purchased software	$	4,525	$	5,501	$	4,915
Capitalized software		152		205		189
Backlog		1,110		2,211		3,745
Total		5,787		7,917		8,849

Amortization included in operating expenses:
Customer relationships		7,719		7,434		5,667
Trade names		159		732		3,241
Non-competes		461		461		496
Total		8,339		8,627		9,404
Total amortization	$	14,126	$	16,544	$	18,253

- 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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