Company: DMRC
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001437749-25-005471
Chunk: 19

Company: Digimarc CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7A
Chunk 19
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 that the carrying value  may exceed the fair value, in accordance with ASC 350 “Intangibles – Goodwill and Other.” The Company operates as a single reporting unit. The Company estimates the fair value of its single reporting unit using a market approach, which takes into account the Company’s market capitalization plus an estimated control premium. In connection with the Company’s annual impairment tests of goodwill as of  June 30, 2024 and 2023, it was concluded that there was no impairment to goodwill as the estimated fair value of the Company’s reporting unit significantly exceeded the carrying value.

   Impairment of Long-Lived Assets   The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset  may not be recoverable, in accordance with ASC 360 “Property, Plant and Equipment.”  

         F-
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         DIGIMARC CORPORATION

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

         (In thousands, except per share data)

       Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of the assets to future net undiscounted cash flows expected to be generated by the assets over their remaining useful life. If such assets are considered to be impaired, the impairment would be recognized in operating results at the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined based on discounted cash flows, observable market values or appraised values, depending on the nature of the assets.   Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

   Research and Development   Research and development costs are expensed as incurred in accordance with ASC 730 “Research and Development.”

   Software Development Costs   Under ASC 985 “Software,” software development costs are to be capitalized beginning when a product’s technological feasibility has been established and ending when a product is made available for general release to customers. To date, the establishment of technological feasibility of the Company’s products has occurred shortly before general release and, therefore, software development costs qualifying for capitalization have been immaterial. Accordingly, the Company has not capitalized any software development costs and has charged all such costs to research and development expense.

   Patent Costs   Costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at