Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

As of September 30, 2020, the goodwill balance of $4.4 million related to the Turner and Red Rock acquisitions. There were no indicators of impairment identified as a result of the Company's review of events and circumstances related to its goodwill subsequent to the acquisitions. Based on our annual impairment testing performed on November 1st, no impairment was recorded. Refer to Note 7 — "Acquisitions" of the notes to the unaudited condensed consolidated financial statements for additional discussion.

Intangible Assets

As of September 30, 2020 and December 31, 2019, intangible assets consisted of the following (in thousands):


	September 30, 2020						December 31, 2019
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
INDEFINITE LIVED INTANGIBLE ASSETS:
CP Water Certificate of Convenience & Necessity service area	$	1,532			$	1,532	$	1,532			$	1,532
Intangible trademark	13				13		13				13
Franchise contract rights	129				129		129				129
Organizational costs	67				67		67				67
	1,741				1,741		1,741				1,741
DEFINITE LIVED INTANGIBLE ASSETS:
Acquired ICFAs	17,978		(13,396)		4,582		17,978		(12,568)		5,410
Sonoran contract rights	7,406		(2,003)		5,403		7,406		(2,003)		5,403
	25,384		(15,399)		9,985		25,384		(14,571)		10,813
Total intangible assets	$	27,125	$	(15,399)	$	11,726	$	27,125	$	(14,571)	$	12,554

A Certificate of Convenience & Necessity ("CC&N") is a permit issued by the ACC allowing a public service corporation to serve a specified area, and preventing other public service corporations from offering the same services within the specified area. The CP Water CC&N intangible asset was acquired through the acquisition of CP Water Company in 2006. CC&N permits are expected to be renewable indefinitely.

Franchise contract rights and organizational costs relate to our 2018 acquisition of Red Rock. Franchise contract rights are agreements with Pima and Pinal counties that allow the Company to place infrastructure in public right-of-way and permits expected to be renewable indefinitely. The organizational costs represent fees paid to federal or state governments for the privilege of incorporation and expenditures incident to organizing the corporation and preparing it to conduct business.

Acquired ICFAs and contract rights related to our 2005 acquisition of Sonoran Utility Services, LLC assets are amortized when cash is received in proportion to the amount of total cash expected to be received under the underlying agreements. Due to the uncertainty of the timing of when cash will be received under ICFA agreements and contract rights, we cannot reliably estimate when the remaining intangible assets' amortization will be recorded. Amortization expense of $0.6 million and $0.8 million was recorded during the three and nine months ended September 30, 2020, respectively. No amortization was recorded for these balances during the three and nine months ended September 30, 2019.