NOTE 3—INTANGIBLE ASSETS

HSNi assesses the impairment of indefinite-lived identifiable intangible assets, principally trademarks and trade names acquired in various acquisitions, at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In performing this review, HSNi assesses the fair values of its intangible assets. If it is determined that the fair value of the indefinite-lived intangible assets is less than the carrying amount, an impairment charge, equal to the excess, is recorded. HSNi utilizes a relief from royalty method to assess the fair values of its trademarks and trade names.

In assessing fair value, HSNi considers, among other indicators, differences between estimated and actual revenue streams and changes in the related discount, royalty and terminal growth rates. Determining these rates requires the exercise of significant judgments. These factors used in the determination of fair value are sensitive to, among other things, changes in the retail consumer market and the general economy.

HSNi conducted its annual test for impairment during the fourth quarter of 2011. HSNi employed and considered the input of specialists to aid in determining appropriate royalty rates to be used in the fair value calculation. The outcome of the annual impairment testing indicated the existence of impairment associated with the indefinite-lived intangible assets at one of the Cornerstone brands. An impairment charge of $2.2 million was recorded and is included in operating expenses in the line item "General and administrative" in the accompanying consolidated statements of operations. An increase in the discount rates or declines in the future estimated revenues or royalty rates could result in future material intangible asset impairment charges.

The balance of intangible assets, net, is as follows (in thousands):

Intangible assets with indefinite lives relate principally to trade names and trademarks acquired in various acquisitions. When definite-lived intangible assets are sold or expire, the cost of the asset and the related accumulated amortization are eliminated and any gain or loss is recognized at such time. For the year ended December 31, 2011, HSNi wrote off $5.6 million of fully amortized definite-lived intangible assets that expired during the year.

Amortization expense for the definite-lived intangible assets was $0.4 million, $0.6 million and $0.6 million for the years ended December 31, 2011, 2010 and 2009. At December 31, 2011 and 2010, the following is information on intangible assets with definite lives (in thousands):