Quarterly report pursuant to sections 13 or 15(d)

2. Plant, Property, and Equipment and Intangible Assets

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2. Plant, Property, and Equipment and Intangible Assets
6 Months Ended
Jun. 30, 2012
Property, Plant and Equipment [Abstract]  
Plant, Property, and Equipment and Intangible Assets

 

Note 2: Plant, Property, and Equipment and Intangible Assets

 

The Company has plant, property and equipment and other intangible assets used in the creation of revenue of the following as of:

 

      6/30/2012       12/31/2011  
Furniture and Equipment   $ 89,159     $ 87,261  
Less Accumulated Depreciation     (59,953 )     (54,367 )
Net Fixed Assets   $ 29,206     $ 32,894  
                 
Trademarks   $ 129,831     $ 129,831  
Product Masters     3,255,107       3,255,107  
Other Intangible Assets     224,605       224,605  
Less Accumulated Amortization     (3,274,628 )     (3,204,524 )
Net Intangible Assets   $ 334,915     $ 405,019  

 

Pursuant to FASB Accounting Standards Codification regarding Topic 350, Intangible Assets, intangible asset(s) acquired, either individually or with a group of other assets shall be initially recognized and measured based on fair value. In the acquisition of the assets from Genius Products, fair value was calculated using a discounted cash flow analysis of the revenue streams for the estimated life of the assets. As this resulted in a fair market value in excess of the purchase price, the assets were recorded at $2,489,082, the total purchase price discounted with the imputed interest rate of 10%.

 

The Company reviews all intangible assets periodically to determine if the value has been impaired by recent financial transactions using the discounted cash flow analysis of revenue stream for the estimated life of the assets. At the six months ending June 30, 2012 and twelve months ending December 31, 2011 it was determined that no impairment exists.

 

The Company continues to develop new CDs and DVDs, in addition to adding content, improved animation and bonus songs/features to their existing CD and DVD collection. In accordance with FASB Accounting Standards Codification regarding the topics of Intangible Assets (350) and Research and Development (730)the costs of new product development and significant improvement to existing products are capitalized while routine and periodic alterations to existing products are expensed as incurred. As of June 30, 2012, the Company has $353,194 in Capitalized Product Development in Process representing DVD, CD, preschool readiness program and toy development projects not yet completed.