Normal repairs and maintenance costs are expensed as incurred.

Expenditures that materially increase

values, change capacities or extend useful lives are capitalized. The related costs and accumulated depreciation
of disposed assets are eliminated and any resulting gain or loss on disposition is included in net income/(loss).
Construction in-process consists primarily of costs associated with building improvements, machinery and
equipment that have not yet been placed into service, unfinished molds as well as in-process internally developed
software.

In accordance with ASC Topic 350-40, “Internal-Use Software,” the Company capitalizes certain costs
incurred in connection with developing or obtaining internal use software. Costs incurred in the preliminary
project stage are expensed. All direct external costs incurred to develop internal-use software during the
development stage are capitalized and amortized using the straight-line method over the remaining estimated
useful lives. Costs such as maintenance and training are expensed as incurred.

Long-Lived Assets
In accordance with ASC Topic 360-10-05, “Impairment or Disposal of Long-Lived Assets”, the Company
assesses potential impairments of its long-lived assets whenever events or changes in circumstances indicate that
the asset’s carrying value may not be recoverable. An impairment charge would be recognized when the carrying
amount of a long-lived asset or asset group is not recoverable and exceeds its fair value. The carrying amount of
a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected
to result from the use and eventual disposition of the asset or asset group.

Goodwill and Intangible Assets

Goodwill and intangible assets consist of goodwill, trade names, trademarks, service marks, trade dress,
patents and other intangible assets acquired during the acquisition of Odyssey Sports, Inc. in 1997, FrogTrader,
Inc. in 2004, the Tour Golf Group Inc. assets in 2006, the uPlay, LLC assets in 2008, and certain foreign
distributors.

In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” goodwill and intangible assets
with indefinite lives are not amortized but instead are measured for impairment at least annually or when events
indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of
goodwill and other indefinite-lived intangible assets over their estimated fair value. If the carrying value exceeds
the estimate of fair value a write-down is recorded. To determine fair value, the Company uses its internal
discounted cash flow estimates, quoted market prices, royalty rates when available and independent appraisals
when appropriate.

Intangible assets that are determined to have definite lives are amortized over their estimated useful lives
and are measured for impairment only when events or circumstances indicate the carrying value may be impaired
in accordance with ASC Topic 360-10-05 discussed above. See Note 8 for further discussion of the Company’s
goodwill and intangible assets.

Investments
The Company determines the appropriate classification of its investments at the time of acquisition and
reevaluates such classification at each balance sheet date. Investments that do not have readily determinable fair
values are stated at cost and are reported in other assets. The Company monitors investments for impairment in
accordance with ASC Topic 325-35-2, “Impairment” and ASC Topic 320-35-17 through 35-35, “Scope of
Impairment Guidance.” See Note 9 for further discussion of the Company’s investments.

Share-Based Compensation
The Company accounts for its share-based compensation arrangements in accordance with ASC Topic 718,
“Compensation—Stock Compensation” (“ASC Topic 718”), which requires the measurement and recognition of
compensation expense for all share-based payment awards to employees and non-employees based on estimated

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