Goodwill represents the excess of the purchase price consideration of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is allocated to the Company's reporting units at the date the goodwill is initially recorded. Once goodwill has been allocated to the reporting units, it generally no longer retains its identification with a particular acquisition but instead becomes identifiable with the reporting unit. As a result, all of the fair value of each reporting unit is available to support the value of goodwill allocated to the unit.

In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test, which required entities to calculate the implied fair value of goodwill and compare that amount to its carrying amount. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019 in conjunction with a quantitative goodwill test performed due to the Company's change in operating segments and restructuring of reporting units. See Note 12 for the impact of the goodwill impairment test.

In accordance with US GAAP requirements for testing for impairment of goodwill, inclusive of the newly adopted amendments, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that fair value exceeds its

carrying amount, then performing a quantitative impairment test is not necessary. If the Company concludes otherwise, the Company is required to perform a quantitative impairment test that requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, the related goodwill is not considered impaired and no further analysis is required. If the carrying value of the reporting unit exceeds its fair value, then the Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. See Note 12 for further discussion.

Intangible assets with finite lives are amortized over their estimated average useful lives. The Company does not have any intangible assets deemed to have indefinite lives. Intangible assets are tested for potential impairment whenever events or changes in circumstances suggest that an asset or asset group's carrying value may not be fully recoverable. An impairment loss, calculated as the difference between the estimated fair value and the carrying value of an asset or asset group, is recognized in the accompanying consolidated statements of operations if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value. The Company continually monitors the estimated average useful lives of existing intangible assets.

In accordance with US GAAP, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. Under US GAAP, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amounts as a basis for determining if it is necessary to perform a quantitative impairment test. Periodically estimating the fair value of a reporting unit requires significant judgment and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge.

During the second quarter of 2019, the Company realigned its business segments to Op Co and Asset Co (See Note 1). Prior to the reorganization, the Investment Management segment was also a reporting unit for purposes of measuring and reporting goodwill. The goodwill that was previously attributable to the Investment Management reporting unit was reallocated to the CIM reporting unit within the Op Co segment and the Asset Co reporting unit based on the relative fair value of the respective portions that became attributable to those reporting units. The Asset Co segment is also a reporting unit for purposes of measuring and reporting goodwill.

Based on the change in segments and restructuring of reporting units, the Company determined that it was necessary to perform a quantitative impairment test which involved estimates of future cash flows, discount rates, economic forecast and other assumptions which are then used in the market approach (earnings and / or transactions multiples) and / or income approach (discounted cash flow method).

The Company performed its annual impairment test at December 31, 2019 by assessing qualitative factors to determine whether it is more likely than not that the fair value of its reporting units is less than their carrying amounts. The Company determined that a quantitative impairment test was not necessary based on the analysis.

Based on the results of the annual impairment analysis at December 31, 2019, the Company did not recognize any additional impairment relating to the CIM or Investment Bank reporting units. Additionally, no impairment charges for goodwill were recognized during the years ended December 31, 2018 and 2017 respectively.


	Investment Management		Investment Bank		Cowen Investment Management		Asset Co		Total
	(dollars in thousands)
Beginning balance - December 31, 2017
Goodwill	$	29,026	$	51,337	$	—	$	—	80,363
Accumulated impairment charges	(10,200)		(9,485)		—		—		(19,685)
Net	18,826		41,852		—		—		60,678

Activity: 2018
Recognized goodwill	—		—		—		—		—
Goodwill impairment charges	—		—		—		—		—

Ending balance: December 31, 2018
Goodwill	29,026		51,337		—		—		80,363
Accumulated impairment charges	(10,200)		(9,485)		—		—		(19,685)
Net	18,826		41,852		—		—		60,678

Activity: 2019
Recognized goodwill (See note 3)	—		81,150		—		—		81,150
Realignment of segment goodwill:
Goodwill	(29,026)		—		22,705		6,321		—
Accumulated impairment charges	10,200		—		(7,979)		(2,221)		—
Goodwill impairment charges	—		—		—		(4,100)		(4,100)

Ending balance: December 31, 2019
Goodwill	—		132,487		22,705		6,321		161,513
Accumulated impairment charges	—		(9,485)		(7,979)		(6,321)		(23,785)
Net	$	—	$	123,002	$	14,726	$	—	$	137,728

In connection with the Quarton transaction (see Note 3), in January 2019, the Company recognized goodwill of $81.2 million and intangible assets (including customer relationships, trade name, backlog and proprietary software) with an estimated fair value of $22.2 million which are included within intangible assets, net in the consolidated statements of financial condition with the expected useful lives ranging from 2 to 4 years with a weighted average useful life of 2.8 years. Amortization expense related to intangibles from the Quarton acquisition for the year ended December 31, 2019 is $8.9 million. Goodwill, the excess of the purchase price over the fair value of net assets, primarily relates to expected synergies from combining operations and has been assigned to the Op Co segment of the Company. Tax deductible goodwill will differ from goodwill recognized by the Company in an amount equal to the difference between actual contingent consideration and estimated contingent consideration (see Note 3).


		December 31, 2019										December 31, 2018
	Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)	(in thousands)										(in thousands)

Trade names	2.6 - 3	$	960	$	(360)	$	600	$	10,622	$	(10,599)	$	23
Customer relationships	2 - 14	51,724		(21,065)		30,659		41,134		(18,960)		22,174
Customer contracts	1.2	—		—		—		800		(800)		—
Non compete agreements and covenants with limiting conditions acquired	5	400		(347)		53		2,237		(2,055)		182
Intellectual property	8	1,188		(119)		1,069		—		—		—
Acquired software	3 - 10	7,323		(4,504)		2,819		8,243		(5,679)		2,564
		$	61,595	$	(26,395)	$	35,200	$	63,036	$	(38,093)	$	24,943

The Company tests intangible assets for impairment if events or circumstances suggest that the asset groups carrying value may not be fully recoverable. For the years ended December 31, 2019 and 2018, no impairment charge for intangible assets was recognized.

Amortization expense related to intangible assets was $13.1 million, $5.0 million, and $6.1 million for the years ended December 31, 2019, 2018, and 2017, respectively, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. All of the Company's intangible assets have finite lives.