GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2016

9. GOODWILL AND OTHER INTANGIBLE ASSETS

As discussed in Note 17 “Geographic Information and Major Clients”, the Company operates in one reportable segment, Customer Engagement Solutions, and has one reporting unit.

The following table presents the changes in the carrying amount of goodwill:


	Year Ended December 31,
(in thousands)	2016			2015			2014
Balance as of January 1,	$	46,776		$	46,860		$	43,469
Goodwill acquired during the year		26,689			—			3,431
Translation adjustments		(301	)		(84	)		(40	)

Balance as of December 31,	$	73,164		$	46,776		$	46,860

Intangible assets are recorded at cost and are amortized using the straight-line method over their estimated useful lives.


(in thousands)	Range of Useful Lives		Cost		Accumulated Amortization			Net book value
December 31, 2016
Customer related intangibles		4-10 years	$	63,091	$	(37,573	)	$	25,518
Technology		3-10 years		58,942		(40,269	)		18,673
Other intangibles		3 years		5,361		(5,361	)		—

Total			$	127,394	$	(83,203	)	$	44,191

December 31, 2015
Customer related intangibles		4-9 years	$	49,546	$	(30,465	)	$	19,081
Technology		3-9 years		48,342		(34,282	)		14,060
Other intangibles		3 years		5,361		(5,084	)		277

Total			$	103,249	$	(69,831	)	$	33,418

Amortization expense of acquired intangibles was reflected in the Company’s consolidated statements of operations as follows:


	Year Ended December 31,
(in thousands)	2016		2015		2014
Amortization expense:
Cost of revenue	$	5,986	$	5,392	$	6,017
Selling and marketing		7,145		6,127		6,022
General and administrative		277		683		1,770

Total amortization expense	$	13,408	$	12,202	$	13,809

As of December 31, 2016, future estimated amortization expense is as follows:


(in thousands)	Future estimated amortization expense
2017	$	12,334
2018		11,334
2019		5,542
2020		2,646
2021		2,623
2022 and thereafter		9,712

	$	44,191

- 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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