Company: FLYW
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000950170-25-027078
Chunk: 351

Company: Flywire Corp
Filing Date: 2025-02-26
Form: 10-K
Item: Item 5
Chunk 351
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 for acquired related intangible assets are determined based primarily on forecasted cash flows, which include estimates for the revenues, expenses and customer attrition associated with the assets. The useful lives of definite-lived trademarks and trade names are based on our plans to phase out the trademarks and trade names in the applicable markets. 

Intangible assets are amortized using a method that reflects the pattern in which the economic benefits of the intangible asset are expected to be realized over their estimated useful lives ranging from one to fifteen years. No significant residual value is estimated for intangible assets. 

The estimated fair values of these intangible assets reflect various assumptions including discount rates, revenue growth rates, operating margins, terminal values, attrition, useful lives and other prospective financial information. 

100

The judgments made in determining the estimated fair value of intangibles as well as the estimated lives, can materially impact net income or loss in periods subsequent to the acquisition through depreciation and amortization, and in certain instances through impairment charges, if the assets become impaired in the future. 

Software Developed for Internal-Use 

We capitalize costs incurred in the development of internal-use software during the application development stage including third-party consulting costs and compensation expenses related to FlyMates who devote time to the development of the projects. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Once the additional functionality is available for general use, capitalization ceases and the asset begins being amortized. 

We evaluate the useful lives of internal-use software whenever changes in circumstances occur that could impact the recoverability of these assets. Unforeseen circumstances in software development, such as a significant change in the manner in which the software is intended to be used, obsolescence or a significant reduction in revenues due to attrition, could require us to implement alternative plans with respect to a particular effort, which could result in the impairment of previously capitalized software development costs. 

Contingent Consideration 

Contingent consideration in business combinations is recognized at fair value on the acquisition date.

In connection with the acquisition of Invoiced, we entered into an agreement to make certain earn-out payments based on Invoiced's achievement of certain targets related to revenue, cross-selling, product and security and IT milestones established through a period ending December 31, 2025. The fair value of the contingent consideration related to the revenue milestones was determined using an option pricing model and the fair value of the contingent consideration related to the cross-selling, product and security and IT