THE DESCARTES SYSTEMS GROUP INC.

Note 5 - Trade Receivables
January 31, January 31,
2011 2010
Trade receivables 15,634 10,525
Less: Allowance for doubtful accounts (1,217) (685)
14,417 9,840
Bad debt expense was $0.5 million for the year ended January 31, 2011 (January 31, 2010 - $0.4 million; January
31, 2009 – nil).
Note 6 - Investment in Affiliate
As part of the acquisition of Porthus, we acquired 44.4% of the outstanding shares of privately-held Desk
Solutions NV (“Desk Solutions”). The investment in Desk Solutions has been accounted for under the equity
method in accordance with ASC Topic 323, “Investments – Equity Method and Joint Ventures” (“ASC Topic
323”). Loss from Desk Solutions of $19,000 for the year ended January 31, 2011 is included in investment
income in the consolidated statements of operations for 2011. This investment was sold in the second quarter of
2011 for proceeds of $487,000. A gain on the sale of this investment of $20,000 is included in investment income
for the year ended January 31, 2011 in the consolidated statements of operations for 2011.
Note 7 - Contingent Acquisition Consideration
On June 30, 2006, we acquired 100% of the outstanding shares of Maryland-based Flagship Customs Services,
Inc. (“FCS”). As part of our acquisition of FCS, we paid $4.0 million to establish a contingent acquisition
consideration escrow that was released to the former shareholders of FCS subject to meeting various criteria,
including their continued employment with Descartes. In accordance with the guidance contained in Emerging
Issues Task Force 95-8 “Accounting for Contingent Consideration Paid to the Shareholders of an Acquired
Enterprise in a Purchase Business Combination” (“EITF 95-8”), we expensed the entire $4.0 million on a straightline
basis over the 24 month service and escrow period applicable to the former shareholders, which ended June
30, 2008.
Note 8 - Capital Assets
January 31, January 31,
2011 2010
Cost
Computer equipment and software 24,257 19,420
Furniture and fixtures 1,895 1,780
Leasehold improvements 2,914 2,267
Accumulated amortization
29,066 23,467
Computer equipment and software 17,822 14,573
Furniture and fixtures 1,630 1,494
Leasehold improvements 2,305 1,918
21,757 17,985
7,309 5,482
Computer equipment and software cost includes $0.3 million of assets recorded under capital leases as of January
31, 2011 (nil as of January 31, 2010). Included within depreciation expense in our consolidated statements of
operations is amortization expense from assets under capital leases of $0.1 million for the year ended January 31,
2011 (January 31, 2010 – nil).
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