Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Intangible assets arose from the acquisition of KVH Media Group (acquired as Headland Media Limited) in May 2013. These intangible assets are being amortized on a straight-line basis over the estimated useful life of 10 years for acquired subscriber relationships. The intangible assets were recorded in pounds sterling and fluctuations in exchange rates cause these amounts to increase or decrease from time to time. As a result of the sale of KVH Media Group Entertainment Limited in April 2022, the Company determined the goodwill and intangible assets associated with this business based on an income approach which estimated the fair value of the reporting unit before and after the sale, and included such amounts in the determination of the gain on sale of the subsidiary.

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 December 31, 2022, the carrying value of the intangible assets acquired in the asset acquisition was $462. 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. An additional $54 and $62 of consideration was earned under the contingent consideration arrangement during the years ended December 31, 2022 and 2021, respectively.

Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at December 31, 2022 and 2021, respectively:

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
December 31, 2022
Subscriber relationships	$	7,649	$	7,245	$	404
Distribution rights	315		315		—
Internally developed software	446		446		—
Proprietary content	153		153		—
Intellectual property	2,284		2,284		—
	$	10,847	$	10,443	$	404
December 31, 2021
Subscriber relationships	$	8,033	$	6,746	$	1,287
Distribution rights	315		315		—
Internally developed software	446		446		—
Proprietary content	153		153		—
Intellectual property	2,284		2,284		—
	$	11,231	$	9,944	$	1,287

Amortization expense related to intangible assets was $499 and $1,027 for years ended December 31, 2022 and 2021, respectively, and was categorized as general and administrative expense.

As of December 31, 2022, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.2 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	1.2

Estimated future amortization expense for intangible assets recorded by the Company at December 31, 2022 is as follows:

Years ending December 31,	Amortization Expense
2023	$	179
2024	71
2025	71
2026	71
2027	5
Thereafter	7
Total amortization expense	$	404

The changes in the carrying amount of intangible assets during the year ended December 31, 2022 is as follows:

	2022
Balance at December 31, 2021	$	1,287
Amortization expense	(499)
Intangible assets acquired in asset acquisition	54
Sale of KVH Media Group Entertainment Limited	(352)
Foreign currency translation adjustment	(86)
Balance at December 31, 2022	$	404

Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. 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, 2022 is as follows:

	Goodwill
Balance at December 31, 2021	$	6,570
Sale of KVH Media Group Entertainment Limited	(1,038)
Foreign currency translation adjustment	(224)
Balance at December 31, 2022	$	5,308