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EFTA01382664

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S-I/A Table of Contra' accounting policy criteria and requires management judgment as to the appropriate time to initiate capitalization. Capitalization of initial payments for contracts and conversion costs only occurs when management is satisfied that such costs arc recoverable through future operations. contractual minimums, and/or penalties in case of early termination. We develop software that is used in providing processing sen-ices to clients. To a much lesser extent, we also develop software to be sold or licensed to clients. Capitalization of internally developed software, primarily associated with operating platforms. occurs only upon management's estimation that the likelihood of successful development and implementation reaches a probable level. Currently unforeseen circumstances in software development 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. In addition to the internally generated intangible assets discussed above, we also record intangible assets as a result of business combinations and asset acquisitions. In these transactions, we typically acquire and recognize intangible assets such as client relationships, software, and trade names. In a business combination, each intangible asset is recorded at its fair value. In an asset acquisition. the cost of the acquisition is allocated among the acquired assets. generally by their relative fair values. We generally estimate the fair value of acquired intangible assets using the excess earnings method, royalty savings method, or urn savings method, all of which are a form of a discounted cash flow analysis. These estimates require various assumptions about the future cash flows associated with the assets, appropriate costs of capital, and other inputs such as an appropriate royalty rate. Changes to these estimates would materially impact the value assigned to

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Independent research project. Not affiliated with the U.S. Department of Justice, FBI, any government agency, or Anthropic. All analytical text on this site is AI-generated (Claude, Anthropic) and iteratively fact-checked against source documents, but may contain errors. Verify all claims against linked EFTA sources before citing.
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