Intangible Assets and Key Money
Intangible assets are recorded at cost and are amortized on a straight-line basis over their estimated useful lives which range from 14 to 20 years. Intangible assets are reviewed for impairment in accordance with the Company's policy for impairment of long-lived assets (see "Impairment of Long-Lived Assets" below).
Key money is the amount of funds paid to a landlord or tenant to acquire the rights of tenancy under a commercial property lease for a certain property. Key money represents the "right to lease" with an automatic right of renewal. This right can be subsequently sold by the Company or can be recovered should the landlord refuse to allow the automatic right of renewal to be exercised. Key money is amortized over the estimated useful life, 39 years.
The following table summarizes intangible assets and key money, included in other assets, net, as follows:
|
| | | | | | | | | | | | |
| January 31, 2014 | January 31, 2013 |
(in thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization |
Product rights | $ | 59,409 |
| $ | (9,405 | ) | $ | 59,409 |
| $ | (6,388 | ) |
Key money deposits | 39,588 |
| (1,722 | ) | 39,632 |
| (719 | ) |
Trademarks | 2,452 |
| (2,452 | ) | 3,452 |
| (3,078 | ) |
| $ | 101,449 |
| $ | (13,579 | ) | $ | 102,493 |
| $ | (10,185 | ) |
In December 2012, the Company made a $47,059,000 payment to Elsa Peretti to retain an exclusive license in all of the countries in which Peretti-designed jewelry and products are currently sold, to make, have made, advertise and sell these items, which are made in conformance to Ms. Peretti's proprietary designs and bear her trademarks. These product rights acquired are being amortized over 20 years.
Amortization of intangible assets and key money for the years ended January 31, 2014, 2013 and 2012 was $4,172,000, $1,685,000 and $1,263,000. Amortization expense is estimated to be approximately $4,200,000 in each of the next five years.
