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Balance Sheet Components
 12 Months Ended
Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]  
Balance Sheet Components Balance Sheet Components
Available-for-sale short-term investments
As of December 31, 2020As of December 31, 2019
 CostUnrealized GainsUnrealized LossesEstimated Fair ValueCostUnrealized GainsUnrealized LossesEstimated Fair Value
(In thousands)
U.S. treasuries$19,996 $1 $— $19,997 $19,967 $23 $— $19,990 

The Company’s short-term investments are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than twelve months. Accordingly, none of the available-for-sale securities have unrealized losses greater than twelve months. The Company did not recognize any other-than-temporary impairment losses related to available-for-sale short-term investment for the years ended December 31, 2019 and 2018. During the year ended December 31, 2020, with the adoption of ASU 2016-13, the Company did not recognize any allowance for credit losses related to available-for-sale short-term investment for the year ended .
Accounts receivable, net
As of December 31,
20202019
(In thousands)
Gross accounts receivable$78,162 $127,926 
Allowance for credit losses(519)(609)
Total accounts receivable, net$77,643 $127,317 

The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.
 Years Ended December 31,
202020192018
(In thousands)
Balance at the beginning of the period$609 $127 $207 
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings— — — 
Provision for expected credit losses186 482 — 
Amount recovered due to collection(276)— (80)
Balance at the end of the period$519 $609 $127 

Property and equipment, net
As of December 31,
20202019
(In thousands)
Machinery and equipment$14,397 $13,402 
Software13,192 11,945 
Computer equipment4,083 4,047 
Leasehold improvements8,023 8,087 
Furniture and fixtures4,048 4,075 
Total property and equipment, gross43,743 41,556 
Accumulated depreciation(27,922)(20,204)
Total property and equipment, net$15,821 $21,352 

Depreciation expense pertaining to property and equipment was $8.8 million, $9.2 million and $3.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. Allocated depreciation expense from NETGEAR was $1.2 million for the year ended December 31, 2018. For the periods prior to the completion of the IPO, the consolidated statements of operations include both the depreciation expense directly identifiable as Arlo’s and allocated depreciation expense from NETGEAR. Refer to Allocated Expenses from NETGEAR as discussed in Note 1, The Company and Basis of Presentation, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for detailed disclosures regarding the methodology used for allocated expenses from NETGEAR.

Intangibles, net

As of December 31, 2020As of December 31, 2019
 GrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
(In thousands)
Technology$9,800 $(9,800)$— 9,800 $(8,540)$1,260 
Other500 (500)— 500 (454)46 
Total intangibles, net$10,300 $(10,300)$— $10,300 $(8,994)$1,306 
As of December 31, 2020, all finite-lived intangibles were fully amortized. Amortization expense of finite-lived intangibles was $1.3 million, $1.5 million and $1.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. No impairment charges were recorded for all periods presented.

Goodwill

There was no change in the carrying amount of goodwill during the year ended December 31, 2020, and the goodwill as of December 31, 2020 and December 31, 2019 was $11.0 million.

On December 30, 2019, the Company derecognized $4.6 million goodwill associated with the Company's commercial operations in Europe, which was incorporated in the calculation of the gain on the sale of business to Verisure.

Goodwill Impairment

The Company performs an annual assessment of goodwill at the reporting unit level on the first day of the fourth fiscal quarter and during interim periods if there are triggering events to reassess goodwill. The Company operates as one operating and reportable segment.

In the first fiscal quarter of 2020, the uncertainty brought about by the COVID-19 pandemic adversely impacted the Company's stock price. The resulting impact to the Company’s market capitalization is a qualitative factor to consider when evaluating whether events or changes in circumstances indicate that it is more likely than not that a potential goodwill impairment exists. The Company concluded that the decline in the price of its common stock as a result of the COVID-19 impact was an indicator that the Company’s goodwill might be impaired. As a result, in the first fiscal quarter of 2020, the Company performed a quantitative assessment using the discounted cash flow model ("DCF model") as of March 29, 2020. The Company estimated the fair value of the business using the DCF model, as management believes forecasted operating cash flows are the best indicator of current fair value. The assumptions used in the DCF model include weighted-average cost of capital, projected revenue based on projected revenue growth rate, projected operating expenses, income taxes as well as capital expenditures and change in working capital. Estimating the fair value of the business was a subjective process involving the use of estimates and judgments, particularly related to future cash flows, which are inherently uncertain. Based on the results of the quantitative assessment using the DCF model, as of March 29, 2020, the respective fair value was substantially in excess of the carrying amount by $94.1 million, or 53%.

On the first day of the fourth quarter of 2020, the Company performed a qualitative assessment in consideration of macroeconomic conditions, industry and market conditions, cost factors, overall company financial performance, and changes in the Company's stock price. The Company did not believe it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company also performed a quantitative assessment by utilizing its market capitalization as a proxy for fair value of the business and comparing it to the carrying amount as of October 1, 2020. Based on the results of the quantitative assessment, the respective fair value was substantially in excess of the carrying amount by $276.2 million, or 195%.

As fair value was greater than carrying amount, goodwill was not impaired as of December 31, 2020. If there are events occurred or circumstances changed (i.e. a decline in the Company’s stock price based on market conditions and deterioration of the Company’s business) that would more likely than not reduce the fair value of the Company below its carrying amount, the Company may have to record a charge to its earnings for the associated goodwill impairment of up to $11.0 million.
Other non-current assets
As of December 31,
20202019
(In thousands)
Non-current deferred income taxes$1,269 $1,318 
Deposits122 764 
Other1,008 1,926 
Total other non-current assets$2,399 $4,008 

Accrued liabilities
As of December 31,
20202019
(In thousands)
Sales and marketing$38,577 53,974 
Sales returns
37,689 28,817 
Accrued employee compensation15,089 11,795 
Operating lease liabilities4,400 3,912 
Freight3,558 2,690 
Warranty obligation2,451 3,169 
Other20,002 23,043 
Total accrued liabilities$121,766 $127,400