3. OTHER ASSET On October 16, 2012, AWS completed the purchase of Weldmex, LLC (“Weldmex”), a limited liability company, from Trade Show Consulting, LLC (“TSC”). Weldmex owns and operates the Weldmex Trade Show. In consideration for the sale, transfer and assignment of TSC’s ownership in the Weldmex Trade Show, between 2008 and 2009, TSC was paid a total of $644,000. As a result, AWS acquired 55% ownership in Weldmex. The existence of Weldmex continued through October 16, 2012 when Weldmex purchased the remaining percentage interest of TSC for $1,750,000. Total payments made to TSC to purchase the Weldmex Trade Show amounted to $2,394,000 and is included under the caption "Other asset" in the Combined Statement of Financial Position. The acquisition of Weldmex was recorded as a business combination. The purchase price has been fully allocated to one asset, identified as the rights to the Weldmex show (“Rights”). Since there is not an active market for this purchase, the cost of the purchase was determined to approximate the fair value of the asset acquired. There were no other assets or liabilities in Weldmex at the time of acquisition. This intangible asset’s useful life is not limited to legal, regulatory, contractual, competitive, economic or other factors. Therefore, management has determined the Rights to have an indefinite life as the use of the asset extends beyond a foreseeable horizon and there is no time limit on the period of time over which it is expected to contribute to the cash flows of AWS. AWS reviews the Rights annually for impairment and will evaluate the remaining useful life if the Rights are determined to be no longer indefinite. Management has determined that an impairment of the intangible asset does not exist as of December 31, 2015. 4. INVESTMENTS Investments, which are comprised entirely of mutual funds, are presented in the combined financial statements at their fair market values and consist of the following at December 31, 2015: Reserve Fund AWS Foundation Total Vanguard Investments Stock Market Index Fund $ 7,279,922 $ 10,531,639 $ 17,811,561 Bond Market Index Fund 3,047,261 7,191,253 10,238,514 Intermediate-Term Investment Grade Bond 1,833,896 4,327,911 6,161,807 International Bond Index 2,614,944 6,202,968 8,817,912 International Stock Index Fund 5,951,059 8,125,724 14,076,783 Windsor II Fund 2,510,460 3,609,065 6,119,525 Short-Term Investment Grade Fund 1,224,057 2,882,856 4,106,913 U.S. Growth Fund 1,312,608 1,956,485 3,269,093 Morgan Growth Fund 1,295,894 1,920,615 3,216,509 Explorer Fund 1,062,625 1,439,024 2,501,649 Strategic Equity Fund 1,057,137 1,489,598 2,546,735 Prime Money Market Fund 200,095 - 200,095 AWS Section Investments - (1,117,812) (1,117,812) Total investments $ 29,389,958 $ 48,559,326 $ 77,949,284 AWS Foundation administers investments on behalf of certain affiliated sections. The investments aggregated to approximately $1,118,000 at December 31, 2015 and are not included in the combined financial statements. Investment loss consisted of the following for the year ended December 31, 2015: Reserve Fund AWS Foundation Total Interest and dividends $ 1,128,924 $ 1,782,588 $ 2,911,512 Net realized and unrealized loss on investments, net of fees of approximately $25,000 and $45,000 respectively (1,224,574) (2,168,721) (3,393,295) Total investments loss $ (95,650) $ (386,133) $ (481,783) JUNE 2016 / WELDING JOURNAL 51 AMERICAN WELDING SOCIETY, INC., AND AWS FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 2015
Welding Journal | June 2016
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