NOTE 3 — GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill by reporting unit were as follows (in thousands):


		Total
		Goodwill
Balance at December 31, 2016	$	20,599
Goodwill acquired during the year		3,322
Effects of changes in foreign currency exchange rates (1)		1,295
Balance at December 31, 2017	$	25,216
Measurement period adjustments		263
Goodwill impairment loss		(17,760)
Effects of changes in foreign currency exchange rates (1)		(981)
Balance at December 31, 2018	$	6,738

(1)Represents the impact of foreign currency translation for instances when goodwill is recorded in foreign entities whose functional currency is also their local currency. Goodwill balances are translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive income.

We performed our annual goodwill impairment test as of July 31, 2018, at which time we had $25.0 million of goodwill. The fair value of the reporting unit was estimated using both market and income-based approaches. Due to a sustained decline in the market capitalization of our common stock during the fourth quarter of 2018, we performed an interim goodwill impairment test in accordance with the provisions of ASU 2017-04.The outcome of this goodwill impairment test resulted in a charge for the impairment of goodwill of $17.8 million, which was recorded in the consolidated financial statements for the year ended December 31, 2018. Management considered that, along with other possible factors affecting the assessment of the Company’s reporting unit for the purposes of performing a goodwill impairment assessment, including management assumptions about expected future revenue forecasts and discount rates, changes in the overall economy, trends in the stock price, estimated control premium and other operating conditions. Changes in estimates and assumptions could materially affect the determination of fair value and goodwill. Due to our transition of packaging our products and services into a single managed service offering, we have determined we have one reporting unit. We do not believe the aggregation of our reporting units impacts the value of our goodwill nor are there any additional events through the date this Form 10-K was filed which impact our assumptions on the determination of the fair value of our goodwill.

We amortized identifiable intangible assets for Evolving Systems Labs, Evolving Systems NC, EVOL BLS, and the Lumata entities on a straight-line basis over their estimated lives ranging from one to eight years. As of December 31, 2018, and December 31, 2017, identifiable intangibles were as follows (in thousands):


	December 31, 2018
		Gross Amount			Accumulated Amortization			Net Carrying Amount	Weighted-Average Amortization Period
Purchased software	$	2,877		$	(1,121)		$	1,756	6.7 yrs.
Trademarks and tradenames		303			(223)			80	2.7 yrs.
Non-competition		39			(38)			1	1.0 yrs.
Customer relationships		4,303			(1,590)			2,713	7.7 yrs.
	$	7,522	(1)	$	(2,972)	(2)	$	4,550	5.8 yrs.

	December 31, 2017
		Gross Amount			Accumulated Amortization			Net Carrying Amount	Weighted-Average Amortization Period
Purchased software	$	2,921		$	(743)		$	2,178	7.7 yrs.
Trademarks and tradenames		310			(189)			121	3.7 yrs.
Non-competition		40			(35)			5	2.0 yrs.
Customer relationships		4,363			(1,054)			3,309	8.7 yrs.
	$	7,634		$	(2,021)		$	5,613	6.8 yrs.

(1) 2018 increase in gross amount due to measurement period adjustments relating to the EVOL BLS purchase price allocation. See Note 2 — Acquisitions for additional information. Includes functional currency adjustment of $0.1 million

(2) Includes functional currency adjustment of less than $0.1 million.

Amortization expense of identifiable intangible assets was $1.0 million and $0.9 million for the years ended December 31, 2018 and 2017, respectively. Expected future amortization expense related to identifiable intangibles based on our carrying amount as of December 31, 2018 was as follows (in thousands):


Year ending December 31,
2019	$	938
2020		937
2021		923
2022		738
2023		360
Thereafter		654
	$	4,550