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## Notes to Consolidated Financial Statements (in thousands, except share and per share data) 

units of accounting based on their relative fair values. EITF 00-21 indicates that the best evidence of fair value is the price of a deliverable when it is regularly sold on a standalone basis. Fair value evidence often consists of entity-specific or vendor-specific objective evidence (VSOE) of fair value. 

The Company enters into contracts that could be considered arrangements with multiple deliverables. These contracts are primarily long-term fixed-bid contracts that provide both application maintenance and application devel- opment services. As indicated in Note 2 to the Consolidated Financial Statements, the Company accounts for such contracts using percentage of completion accounting, which is the prevailing industry practice. The Company is currently evaluating the possible prospective impact of EITF 00- 21 on the Company’s results of operations related to contracts entered into after June 15, 2003. 

## 3. Supplemental Financial Data 

## Property and Equipment 

Property and equipment consist of the following: 

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Depreciation expense was $7,516, $6,368 and $4,507 for the years ended December 31, 2002, 2001 and 2000, respectively. 

## Accrued Expenses and Other Liabilities 

Accrued expenses and other current liabilities consist of the following: 

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## 4. Investments 

On June 30, 2002, Cognizant Technology Solutions Ireland Limited (“CTS Ireland”), a newly formed wholly owned subsidiary of the Company, pur- chased certain assets and assumed certain liabilities from UnitedHealthcare Ireland Limited (“UHCI”), a subsidiary of UnitedHealth Group, for $3,043 

(including approximately $143 of direct deal costs). In accordance with FAS 142, this transaction was determined to be an acquisition of assets, not a business combination. 

UHCI previously provided, and will continue to provide through CTS Ireland, application development and maintenance services, using the existing staff of approximately 70 software professionals. The acquisition of the assets of UHCI, is designed to enable the Company to provide a wide range of services to the Company’s clients in Europe and worldwide and represents the initial implementation of the Company’s previously announced international expansion strategy. 

In accordance with FAS 142, the Company has allocated, based upon an independent appraisal, the purchase price to the UHCI tangible and intangi- ble assets and liabilities acquired. The details of the allocation and the respective useful lives over which these assets are being amortized are pro- vided in the table below. Amortization of $148, related to the acquisition of these assets, has been included in the Consolidated Statements of Operations for the six-month period ended December 31, 2002. Such net assets, excluding amounts assigned to fixed assets, have been included as intangible assets in the Consolidated Balance Sheets and as identifiable assets in the European segment in Note 12. The operating results of CTS Ireland have been included in the consolidated financial statements of the Company effective July 1, 2002. 

On October 29, 2002, the Company completed the transfer of Silverline Technologies, Inc.’s (“Silverline”) practice, which serviced a major financial services company to the Company for $10,424 (including approximately $620 of direct deal costs). In accordance with FAS 142, this transaction was deter- mined to be an acquisition of assets, not a business combination. 

Under the terms of the transfer, the Company will provide application design, development and maintenance services to such major financial serv- ices company through an acquired workforce of approximately 300 IT and support professionals located primarily in the United States and India. Amortization of $178, related to the acquisition of these assets, has been included in the Consolidated Statements of Operations for the two-month period ended December 31, 2002. Such net assets have been included as intangible assets in the Consolidated Balance Sheets and as identifiable assets in the North American segment in Note 12. 

Since the transfer was effected on October 29, 2002, the operating results of this transfer have been included in the consolidated financial statements of the Company commencing from that date. 

The operating results of UHCI and Silverline, for the periods included indicat- ed above, were not material to the consolidated operating results of the Company for the year ended December 31, 2002. 

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