Microsoft Corporation Annual Report 2005
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NOTES TO FINANCIAL STATEMENTS

NOTE 9    INTANGIBLE ASSETS

The components of finite-lived intangible assets are as follows:

(In millions)
June 30 2006   2005
  Gross
carrying
amount
spacer Accumulated
amortization
spacer Net carrying
amount
spacer Gross
carrying
amount
spacer Accumulated
amortization
spacer Net carrying
amount
Contract-based $0,954   $(661)   $292   $0,957   $(606)   $351
Technology-based 458   (255)   203   309   (200)   109
Marketing-related 42   (32)   10   35   (25)   10
Customer-related 54   (21)   33   40   (11)   29
    Total $1,508   $(969)   $539   $1,341   $(842)   $499

During fiscal year 2006 and 2005, we recorded additions to intangible assets of $189 million and $90 million, respectively. We estimate that we have no significant residual value related to our intangible assets. The components of finite-lived intangible assets acquired during fiscal years 2006 and 2005 were as follows:

(In millions)
Year Ended June 30 2006   2005
  Amount spacer Weighted
average life
spacer Amount spacer Weighted
average life
 
Contract-based $  36   4 years   $ 16   6 years
Technology-based 140   4 years   64   5 years
Marketing-related 5   3 years    
Customer-related 8   4 years   10   5 years
    Total $ 189       $ 90    

Acquired intangibles are generally amortized on a straight-line basis over weighted average periods. Intangible assets amortization expense was $127 million for fiscal year 2006, $161 million for fiscal year 2005, and $170 million for fiscal year 2004. The estimated future amortization expense related to intangible assets as of June 30, 2006 is as follows:

(In millions)
Year Ended June 30 Amount
spacer
2007 $ 150
2008 126
2009 83
2010 60
2011 46
    Total $ 465
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