Purchase Price Allocation Over the past several years, we have acquired several companies  that complement our business operations. Over the past three years,  the total cash paid for acquisitions, less cash acquired, was $281.9  million. As of December 31, 2010, we have recorded $317.7 million  of goodwill arising from acquisitions. As of December 31, 2010, we  allocated $251.7 million of gross value to intangible assets, primar- ily for customer-related assets, technology-based assets, and intel- lectual property. The estimated useful lives of the intangible assets  range from one to 25 years. Management judgment is required in allocating the purchase price  to the acquired assets and liabilities. For each acquisition, we allo- cate the purchase price to the assets acquired, liabilities assumed,  and goodwill in accordance with ASC 805,  Business Combinations .  Once it has been determined that recognition of an asset or liability  in a business combination is appropriate, the asset or liability gen- erally is measured at fair value in accordance with the principles  of ASC 820,  Fair Value Measurements and Disclosures . Fair value  is the price that would be received to sell an asset or paid to trans- fer a liability in an orderly transaction between market participants  at the measurement date. The determination of the fair values of intangible assets requires  significant management judgment in each of the following areas: Goodwill recorded on our Consolidated Balance Sheet as of  December 31, 2010 was $317.7 million. In accordance with ASC 350,  Intangibles—Goodwill and Other , we do not amortize goodwill.  Instead, it is subject to an impairment test annually, or whenever  indicators of impairment exist, based on a discounted cash-flow  model. An impairment would occur if the carrying amount of a report- ing unit, including goodwill, exceeded the fair value of that report- ing unit. Our reporting units are components of our reportable  segments and constitute businesses for which discrete financial  information, which is regularly reviewed by management, is avail- able. We performed annual impairment reviews in the fourth quarter of 2010, 2009, and 2008 and did not record any impairment  losses in these years, reflecting our assessment that our estimates  of fair value substantially exceeded the carrying value of our reporting units. We believe that the accounting estimates related to purchase price  allocations are critical accounting estimates because the assump- tions impact the amounts and classifications of assets and liabilities  presented in our Consolidated Balance Sheets, the amount of amor- tization and depreciation expense, if any, recorded in our Consolidated  Statements of Income, and the impairment testing performed in  subsequent periods. U  Estimate the remaining useful life of the assets: For each intan- gible asset, we use judgment and assumptions to establish the  remaining useful life of the asset. For example, for customer  relationships, we determine the estimated useful life with refer- ence to observed customer attrition rates. For technology-related  assets such as databases, we make judgments about the demand  for current data and historical metrics in establishing the remain- ing useful life. For internally developed software, we estimate  an obsolescence factor associated with the software. U  Assess the appropriate method for recording amortization expense  over the intangible asset’s useful life: We use judgment to deter- mine the rate at which the amortization expense should be rec- ognized. In accordance with ASC 350,  Intangibles—Goodwill  and Other , the method of amortization should reflect the pattern  in which the economic benefits of the intangible asset are con- sumed or otherwise used up. If that pattern cannot be reliably  determined, a straight-line amortization method should be used.  Based on this guidance, we amortize intangible assets over their  expected useful life using a straight-line amortization method. U  Identify the acquired intangible assets: For each acquisition, we  identify the intangible assets acquired. These intangible assets  generally consist of customer relationships, trademarks and  tradenames, technology-related intangibles including internally  developed software and databases, and non-compete agreements. U  Estimate the fair value of these intangible assets: We consider  various approaches to value the intangible assets. These valua- tion approaches include the cost approach, which measures the  value of an asset based on the cost to reproduce it or replace it  with another asset of like utility; the market approach, which  values the asset through an analysis of sales and offerings of  comparable assets; and the income approach, which measures  the value of an asset based by measuring the present worth of  the economic benefits it is expected to produce. Morningstar, Inc. 2010 Annual Report 93 Goodwill