Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The Company’s goodwill and intangible assets are associated with the purchase of Virtek Communication (now KVH Industries Norway AS) in September 2010, Headland Media Limited (now known as the KVH Media Group) in May 2013, and Videotel in July 2014.

Intangible assets are subject to amortization. The following table summarizes other intangible assets as of December 31, 2016 and 2015, respectively:



	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
December 31, 2016
Subscriber relationships	$	16,888	$	6,431	$	10,457
Distribution rights	4,122		1,180		2,942
Internally developed software	2,301		1,904		397
Proprietary content	7,960		4,431		3,529
Intellectual property	2,284		2,056		228
Favorable lease	627		342		285
	$	34,182	$	16,344	$	17,838
December 31, 2015
Subscriber relationships	$	19,161	$	4,426	$	14,735
Distribution rights	4,736		895		3,841
Internally developed software	2,457		1,244		1,213
Proprietary content	8,812		2,879		5,933
Intellectual property	2,283		1,729		554
Favorable lease	696		217		479
	$	38,145	$	11,390	$	26,755

The Company amortizes its intangible assets over the estimated useful lives of the respective assets as discussed above in our Summary of Significant Accounting Policies. Amortization expense related to intangible assets was $4,956, $5,526, and $3,859 for years ended December 31, 2016, 2015, and 2014, respectively.

Amortization expense related to intangible assets for the years ended December 31, 2016, 2015, and 2014 was as follows:



Expense Category	2016		2015		2014
Cost of service sales	$	2,068	$	1,978	$	1,123
General administrative expense	2,888		3,548		2,736
Total amortization expense	$	4,956	$	5,526	$	3,859

As of December 31, 2016, the total weighted average remaining useful lives of the definite-lived intangible assets was 5.2 years and the weighted average remaining useful lives by the definite-lived intangible asset category are as follows:



Intangible Asset	Weighted Average Remaining Useful Life in Years
Subscriber relationships	5.8
Distribution rights	11.3
Internally developed software	1.4
Proprietary content	2.5
Intellectual property	0.8
Favorable lease	2.5

Estimated future amortization expense for intangible assets recorded by the Company at December 31, 2016 is as follows:



Years ending December 31,	Amortization Expense
2017	$	4,129
2018	3,720
2019	2,842
2020	2,084
2021	2,084
Thereafter	2,979
Total amortization expense	$	17,838

The changes in the carrying amount of intangible assets during the year ended December 31, 2016 is as follows:



	2016
Balance at January 1	$	26,755
Amortization expense	(4,956		)
Foreign currency translation adjustment	(3,961		)
Balance at December 31	$	17,838

Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. All of the Company's goodwill as of December 31, 2016 relates to its mobile connectivity reportable segment. None of the Company's goodwill is deductible for tax purposes. The changes in the carrying amount of goodwill during the year ended December 31, 2016 is as follows:



	Goodwill
Balance at January 1, 2015	$	40,454
Foreign currency translation adjustment	$	(3,707	)
Balance at December 31, 2015	$	36,747
Foreign currency translation adjustment	(5,404		)
Balance at December 31, 2016	$	31,343

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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