6.	Intangible Assets and Goodwill

Intangible assets consisted of the following (

in thousands, except for weighted average amortization period

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period
June 30, 2018
Customer relationships	$	156,790	$	(96,249	)	$	60,541	11.8 years
Trade names		16,246		(15,097	)		1,149	0.5 years
Intellectual property		21,700		(4,733	)		16,967	4.5 years
Restrictive covenants		263		(212	)		51	1.1 years
Total	$	194,999	$	(116,291	)	$	78,708

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period
December 31, 2017
Customer relationships	$	159,290	$	(89,106	)	$	70,184	11.3 years
Trade names		16,246		(13,916	)		2,330	1 year
Intellectual property		21,700		(2,874	)		18,826	5.2 years
Restrictive covenants		263		(121	)		142	1.3 years
Total	$	197,499	$	(106,017	)	$	91,482

Amortization expense of intangible assets is expected to approximate the following

(in thousands):

Year ending December 31,
2018	$	11,579
2019		9,183
2020		7,664
2021		7,197
2022		7,197
Thereafter		35,888
Total	$	78,708

For the

three

months ended

June 30, 2018

and

2017,

amortization expense related to intangible assets was

$6.7

million and

$4.5

million, respectively. For the

six

months ended

June 30, 2018

and

2017,

amortization expense related to intangible assets was

$12.8

million and

$9.7

million, respectively.

The Company assesses goodwill for impairment on an annual basis as of

June

30th

of each year or more frequently if an event occurs or changes in circumstances would more likely than

not

reduce the fair value of a reporting unit below its carrying amount. Assessment of goodwill impairment is at the HMS Holdings Corp. entity level as the Company operates as a single reporting unit. The Company completed the annual impairment test as of

June 30, 2018

electing to perform the

first

step of the goodwill impairment test by comparing the fair value of the reporting unit with its carrying value, including goodwill. In calculating the fair value of the reporting unit, the Company utilized a weighting across

three

commonly accepted valuation approaches: an income approach, a guideline public company approach and a merger and acquisition approach. The income approach to determining fair value computes projections of the cash flows that the reporting unit is expected to generate converted into a present value equivalent through discounting. Significant assumptions in the income approach include income projections, a discount rate and a terminal growth value which are all level

inputs. The income projections include assumptions for revenue and expense growth which are based on internally developed business plans and largely reflect recent historical revenue and expense trends. The discount rate was based on a risk free rate plus a beta adjusted equity risk premium and specific company risk premium. The terminal growth value is Company specific and was determined analyzing inputs such as historical inflation and the GDP growth rate. The guideline public company approach and merger and acquisition approach are based on pricing multiples observed for similar publicly traded companies or similar market companies that were sold. The results of the annual impairment assessment provide that the fair value of the reporting unit was significantly in excess of the Company’s carrying value, including goodwill; therefore,

impairment was indicated and step

two

was

not

performed. If actual results are

not

consistent with our estimates or assumptions, the Company

may

be exposed to an impairment charge that could materially adversely impact our consolidated financial position and results of operations.

There were

impairment charges related to goodwill during the years ended

December 31, 2017,

2016

2015.

There were

changes in the carrying amount of goodwill for the

six

-months ended

June 30, 2018.