Note 7 - Impairment Losses & Restructuring Exit Cost

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

7. IMPAIRMENT LOSSES AND RESTRUCTURING/EXIT COST

Impairment loss

As of December 31, 2022, based on the quantitative assessment, we concluded that goodwill was partly impaired. Our annual impairment testing resulted in impairment charge of $4,187 and $3,865 in Americas and Malaysia reporting units, respectively. This was triggered by the increase in WACC assumption. The steep increase in risk free rates and interest rates in the past few quarters have led to a sharp increase in WACC assumptions. As of December 31, 2021, based on the qualitative and quantitative assessment, we concluded that there was no impairment of goodwill.

As of December 31, 2022 and 2021, the Company recognized an impairment charge of $1,110 and $4,514 respectively on right-of-use assets related to operating leases in a few geographies. Given the increasing adoption of the work from home delivery model, we are continuously evaluating our brick-and-mortar infrastructure with a view of rationalizing excess capacity. The Company does not plan to use such sites for 'on premise' operations and as per the existing contractual terms of the lease agreement the Company does not have the right to stop making lease payments for the remaining lease terms or to sublease such premises. The remaining lease term for such sites as at year end ranges from 12-51 months.

Restructuring/Exit cost

The table below summarizes the balance of accrued restructuring cost, voluntary/involuntary termination costs and other acquisition related costs, which are included in other accrued liabilities in our consolidated balance sheet. 

	Year Ended December 31, 2022
	Employee related			Facilities related			Total
Balance on December 31, 2021		310			155			465
Accruals		551			111			662
Payments		(822	)		(266	)		(1,088	)
Balance on December 31, 2022		39			-			39

	Year Ended December 31, 2021
	Employee related			Facilities related			Total
Balance on December 31, 2020		-			25			25
Accruals		1,749			193			1,942
Payments		(1,439	)		(63	)		(1,502	)
Balance on December 31, 2021		310			155			465

Employee related

The Company has closed few of its facilities in Peru in 2022 and Philippines in 2021, we have terminated service of number of employees working in those facilities and recognized a provision for employee-related costs regarding the above termination. We expect to pay the remaining termination costs of $39 by the end of the second quarter of 2023.