Goodwill and Intangible Assets

Goodwill

The following table sets forth the changes in the carrying amount of goodwill for the three months ended March 31, 2019:



	Amounts
Balance at December 31, 2018	$	32,213
Foreign currency translation adjustment	632
Balance at March 31, 2019	$	32,845

Intangible Assets

The changes in the carrying amount of intangible assets during the three months ended March 31, 2019 are as follows:



	Amounts
Balance at December 31, 2018	$	10,518
Amortization expense	(959		)
Intangible assets acquired in asset acquisition	25
Foreign currency translation adjustment	223
Balance at March 31, 2019	$	9,807

Intangible assets arose from an acquisition made prior to 2013, the acquisition of KVH Media Group (acquired as Headland Media Limited) in May 2013 and the acquisition of Videotel in July 2014. Intangibles arising from the acquisition made prior to 2013 are being amortized on a straight-line basis over an estimated useful life of 7 years. Intangibles arising from the acquisition of KVH Media Group are being amortized on a straight-line basis over the estimated useful life of: (i) 10 years for acquired subscriber relationships, (ii) 15 years for distribution rights, (iii) 3 years for internally developed software and (iv) 2 years for proprietary content. Intangibles arising from the acquisition of Videotel are being amortized on a straight-line basis over the estimated useful life of: (i) 8 years for acquired subscriber relationships, (ii) 5 years for favorable leases, (iii) 4 years for internally developed software and (iv) 5 years for proprietary content. The intangibles arising from the KVH Media Group and Videotel acquisitions were recorded in pounds sterling and fluctuations in exchange rates could cause these amounts to increase or decrease from time to time.

In January 2017, the Company completed the acquisition of certain subscriber relationships from a third party. This acquisition did not meet the definition of a business under ASC 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business, which the Company adopted on October 1, 2016. The Company ascribed $100 of the initial purchase price to the acquired subscriber relationships definite-lived intangible assets with an initial estimated useful life of 10 years. Under the asset purchase agreement, the purchase price includes a component of contingent consideration under which the Company is required to pay a percentage of recurring revenues received from the acquired subscriber relationships through 2026 up to a maximum annual payment of $114. As of March 31, 2019, the carrying value of the intangible assets acquired in the asset acquisition was $202. As the acquisition did not represent a business combination, the contingent consideration arrangement is recognized only when the contingency is resolved and the consideration is paid or becomes payable. The amounts payable under the contingent consideration arrangement, if any, will be included in the measurement of the cost of the acquired subscriber relationships. During the three months ended March 31, 2019, $25 additional consideration was earned under the contingent consideration arrangement.

Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at March 31, 2019 and December 31, 2018, respectively:



	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
March 31, 2019
Subscriber relationships	$	17,742	$	10,825	$	6,917
Distribution rights	4,290		1,799		2,491
Internally developed software	2,327		2,327		—
Proprietary content	8,181		7,812		369
Intellectual property	2,284		2,284		—
Favorable lease	645		615		30
	$	35,469	$	25,662	$	9,807
December 31, 2018
Subscriber relationships	$	17,570	$	10,337	$	7,233
Distribution rights	4,233		1,731		2,502
Internally developed software	2,327		2,327		—
Proprietary content	8,164		7,439		725
Intellectual property	2,284		2,284		—
Favorable lease	643		585		58
	$	35,221	$	24,703	$	10,518

Amortization expense related to intangible assets for the three months ended March 31, 2019 and 2018 was as follows:



	Three Months Ended March 31,
Expense Category	2019		2018
Cost of service sales	$	373	$	399
General and administrative expense	586		698
Total amortization expense	$	959	$	1,097

As of March 31, 2019, the total weighted average remaining useful lives of the definite-lived intangible assets was 3.1 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	3.6
Distribution rights	9.1
Proprietary content	0.3
Favorable lease	0.3

Estimated future amortization expense remaining at March 31, 2019 for intangible assets acquired was as follows:



Remainder of 2019	$	2,069
2020	2,225
2021	2,225
2022	1,463
2023	544
Thereafter	1,281
Total future amortization expense	$	9,807

For intangible assets, the Company assesses the carrying value of these assets whenever events or circumstances indicate that the carrying value may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset, or asset group, to the future undiscounted cash flows expected to be generated by the asset, or asset group. There were no events or changes in circumstances during the first quarter of 2019 which indicated that an assessment of the impairment of goodwill and intangible assets was required.