In response to a question of mine on AOL, TSeltzer came up with the following which should give us a clue as to the GameFX charge. One might guess that besides an initial charge this quarter the rest will be amortized over five years. Any of our CPAs want to do the math?
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Someone asked how THQ had accounted for its past acquisitions of Heliotrope and Inland. The answer is: amortized over five years. From the Annual Report for 1996, p. F-19:
"9. OTHER LONG-TERM ASSETS
On July 1, 1996, the Company acquired a 25% interest in Inland, a
Software developer for home entertainment game systems. The investment consisted of $300,000 in cash and 52,660 shares of Common Stock valued at $300,000, and is included in other long-term assets in the accompanying balance sheet. The Company has contracted with Inland for the development of 32-bit and 64-bit versions of Turner's World Championship Wrestling and BASS Masters Classic. The Company's investment exceeds its equity in the underlying net
assets by $613,000 which is being amortized over five years. The Company's equity in the operating results of Inland is not material to the results of operations.
On August 2, 1996, the Company acquired the business of Heliotrope Studios, Inc. ("Heliotrope"), an interactive Software developer for PC CD-ROM and an assignment of the distribution license and certain work-in-progress for a PC CD-ROM title (Pax Imperia: Eminent Domain) from Blizzard Entertainment, a division of Davidson Associates. In connection with the acquisition, the Company incurred costs of $115,000 and assumed certain liabilities
(approximately $150,000) of Heliotrope. The excess of the Company's cost of the acquisition over the estimated fair value of assets acquired (approximately $265,000) has been included as a long-term investment in the accompanying balance sheet. Such excess cost is being amortized over 60 months. Because Heliotrope's assets and operations prior to the acquisition were insignificant, no pro forma information is presented." |
