Property and Equipment and Software and Content Development Costs

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment and Software Development Costs

7. Property and Equipment and Software and Content Development Costs

Property and equipment

Property and equipment consisted of the following as of:

	Estimated useful life (years)	December 31,
(dollars in thousands)		2022		2021
Land	—	$	9,548	$	9,548
Building	39	61,284		61,284
Building improvements	7 - 20	10,874		10,874
Equipment	1 - 5	2,312		2,320
Computer hardware	1 - 5	47,886		47,768
Computer software	1 - 5	20,299		21,347
Construction in progress	—	3,500		2,135
Furniture and fixtures	2 - 7	3,264		2,658
Leasehold improvements	Lesser of lease term or estimated useful life	11,822		12,086
Total property and equipment		170,789		170,020
Less: accumulated depreciation		(63,363)		(58,592)
Property and equipment, net		$	107,426	$	111,428

Depreciation expense was $14.1 million, $14.4 million and $19.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

During the year ended December 31, 2022, we recorded insignificant noncash impairment charges against certain property and equipment assets. These impairment charges resulted primarily from our decision to cease using a portion of our leased office space and are reflected in general and administrative expense on the statements of comprehensive income.

During the year ended December 31, 2021, we recorded impairment charges of $1.7 million against certain property and equipment assets. These impairment charges resulted primarily from our decision to close our Austin office and are reflected in general and administrative expense on the statements of comprehensive income.

Software and content development costs

Software and content development costs consisted of the following as of:

	Estimated useful life (years)	December 31,
(dollars in thousands)		2022		2021
Software development costs	3 - 7	$	250,551	$	196,337
Content development costs	5	3,409		—
Less: accumulated amortization		(112,937)		(74,960)
Software and content development costs, net		$	141,023	$	121,377

During the years ended December 31, 2022 and 2020, we recorded noncash impairment charges of $2.3 million and $4.3 million, respectively, against certain previously capitalized software development costs that reduced the carrying value of those assets to zero. The impairment charges were reflected in general and administrative expense and cost of recurring revenue, respectively, on the statements of comprehensive income. These impairment charges resulted primarily from our decision to accelerate the end of customer support for certain solutions.

Other changes to the gross carrying amount of software and content development costs were primarily related to qualifying costs associated with development activities that are required to be capitalized under the internal-use software accounting guidance such as those for our cloud solutions and online education curriculum, write-offs of fully amortized assets, and the effect of foreign currency translation.

Amortization expense related to software and content development costs was $36.8 million, $31.0 million and $31.7 million for the years ended December 31, 2022, 2021 and 2020, respectively, and is included primarily in cost of recurring.