6. Operating expenses

Direct expenses



Year ended December 31,		2015		2014		2013
Employee compensation expenses	$	22,855	$	22,857	$	20,755
Buildings and facilities expenses		7,179		7,609		7,510
Travel, advertising and promotion expenses		22,150		23,006		22,077
Other direct expenses ( net of recoveries)		3,842		4,412		3,666
	$	56,026	$	57,884	$	54,008

Selling, general and administrative (“SG&A”) expenses



Year ended December 31,		2015		2014		2013
Employee compensation expenses	$	166,418	$	159,398	$	158,448
Buildings and facilities expenses		41,404		41,725		40,820
Travel, advertising and promotion expenses		22,307		22,454		20,728
Other SG&A expenses		24,861		24,643		23,740
	$	254,990	$	248,220	$	243,736

Employee compensation expenses



Year ended December 31,		2015		2014		2013
Wages, salaries and other benefits	$	139,878	$	136,650	$	137,346
Social security costs		10,692		11,067		10,931
Defined contribution plans		3,794		3,378		3,867
Share-based payment expenses		11,006		10,846		8,266
Profit-sharing and bonuses		23,903		14,781		18,793
Termination benefits		-		5,533		-
	$	189,273	$	182,255	$	179,203

6. Operating expenses (continued)

During the year ended December 31, 2014, the Company initiated a management reorganization impacting various members of senior management, including some key management personnel. In total, $5,533,000 of termination benefits were recognized in selling, general and administrative expenses during the year ended December 31, 2014 in relation to the reorganization of management.

Depreciation and amortization expenses



Year ended December 31,		2015		2014		2013
Depreciation expense	$	35,374	$	39,966	$	39,655
Amortization expense		6,658		4,570		3,625
	$	42,032	$	44,536	$	43,280

During the year ended December 31, 2015, depreciation expense of $4,340,000 (2014: $5,949,000; 2013: $6,136,000) and amortization expense of $4,680,000 (2014: $2,620,000; 2013: $1,617,000) was recorded relating to software.

Impairment loss

During the year ended December 31, 2014, the Company recognized a total impairment loss of $8,084,000 on its auction site property located in Narita, Japan. The impairment loss consisted of $6,094,000 on the land and improvements and $1,990,000 on the auction building (the ”Japanese assets“). Management assessed the recoverable amounts of the Japanese assets when results of an assessment of the Japan auction operations and performance of that auction site indicated impairment, and management concluded that the undiscounted cash flows resulted in recoverable amounts below the carrying value of the Japanese assets. The fair values of the Japanese assets were determined to be $16,150,000 for the land and improvements and $4,779,000 for the auction building based on the fair value less costs of disposal.

The Company performed a valuation of the Japanese assets as at September 30, 2014. The fair value of the land and improvements was determined based on comparable data in similar regions and relevant information regarding recent events impacting the local real-estate market (Level 3 inputs). The fair value of the auction building was determined based on a depreciated asset cost model with adjustments for relevant market participant data based on the Company‘s experience with disposing of similar auction buildings and current real estate transactions in similar regions (Level 3 inputs).

Determination of the recoverable amount of the Japanese assets involved estimating any costs that would be incurred if the assets were disposed of, including brokers‘ fees, costs to prepare the Japanese assets for sale and other selling fees. In determining these costs, management assumed that any costs required to prepare the Japanese assets for sale could be estimated based on current market rates for brokers‘ fees and management‘s experience with disposing of similar auction sites, taking into consideration the relative newness of the Japan auction site (Level 3 inputs).

The impaired Narita land and improvements and auction building form part of the Company‘s Core Auction reportable segment.