Annual report pursuant to Section 13 and 15(d)

NOTE 7: - GOODWILL AND OTHER INTANGIBLE ASSETS, NET

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NOTE 7: - GOODWILL AND OTHER INTANGIBLE ASSETS, NET
12 Months Ended
Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Text Block]
NOTE 7:–                  GOODWILL AND OTHER INTANGIBLE ASSETS, NET

a.              Goodwill

The Company allocates goodwill acquired in a business combination to the appropriate reporting unit as of the acquisition date. Currently, the Company’s reporting units are also its reportable segments and the associated goodwill was determined when the specific businesses in the reportable segments were purchased.

A summary of the goodwill by business segment is as follows:

   
December 31,
2011
   
Additions
   
Adjustments (currency)
   
December 31,
2012
 
Training and Simulation Division
  $ 24,435,641     $     $     $ 24,435,641  
Battery and Power Systems Division
    5,985,557             141,100       6,126,657  
Total
  $ 30,421,198     $     $ 141,100     $ 30,562,298  

b.              Other intangible assets:

     
December 31,
 
     
2012
   
2011
 
 
Useful life
 
Cost
   
Net book value
   
Cost
   
Net book value
 
Technology
4-8 years
  $ 6,788,000     $ 189,429     $ 6,788,000     $ 284,143  
Capitalized software costs
1-3 years
    3,690,416       491,433       3,355,716       616,819  
Trademarks
10 years
    28,000       14,000       28,000       16,800  
Backlog/customer relationship
1-10 years
    744,000       31,000       744,000       37,200  
Customer list
2-10 years
    6,773,645       621,740       6,773,645       1,243,480  
        18,024,061     $ 1,347,602       17,689,361     $ 2,198,442  
Exchange rate differences
      91,671               155,663          
Less - accumulated amortization
      (16,676,459 )             (15,490,920 )        
Amortized cost
      1,439,273               2,354,104          
Trademarks (indefinite lives)
      799,000               799,000          
Net book value
    $ 2,238,273             $ 3,153,104          

Amortization expense amounted to $1,185,539 and $1,905,097 for the years ended December 31, 2012 and 2011, respectively, including amortization of capitalized software costs of $460,085 and $603,393, respectively.

c.              Estimated amortization expenses for the years shown is as follows:

Year ending December 31,
 
2013
  $ 1,089,442  
2014
    231,160  
2015
    27,000  
2016
     
Total
  $ 1,347,602  

Goodwill and other intangible assets are adjusted on a quarterly basis for any change due to currency fluctuations and any variation is included in the accumulated other comprehensive income on the Balance Sheet.