Goodwill

We test goodwill for impairment annually during our first fiscal quarter, referred to as the annual test date. We will also test for impairment between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is performed at a reporting-unit level, which is defined as an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

During the quarter ended June 30, 2016, we elected to bypass the optional qualitative step of the goodwill impairment assessment, as permitted by the authoritative guidance, and proceed directly with the quantitative step, under which we compared the estimated fair value of each reporting unit with goodwill to its net carrying amount. An impairment loss, if any, is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. We determined the fair value of our reporting units by considering two valuation methods, consisting of the income approach (based upon estimates of future discounted cash flows for each reporting unit) and a market comparable approach (based upon valuation multiples of companies that operate in similar industries with similar operating characteristics). The net cash flows used to determine fair value under the income approach represent our best estimate of projected operating results and assumed terminal growth rates, which are dependent on a number of significant assumptions, including historical experience, expectations of future performance, and expected changes to the macroeconomic variables and industry in which the Company operates, and are subject to changes given the inherent uncertainty in predicting future results. We also considered the Company's stock price and market capitalization as a corroborative step in assessing the reasonableness of the fair values estimated for the reporting units as part of the goodwill impairment assessment. The results of the goodwill impairment assessment established that the fair value for each reporting unit with goodwill significantly exceeded its respective net carrying amount, indicating that no goodwill impairment existed as of the annual test date.

We do not amortize goodwill as it has been determined to have an indefinite useful life.

Goodwill by reporting unit consists of the following:



	June 30, 2016		March 31, 2016
NextGen Division	$	149,258	$	149,258
RCM Services Division	32,290		32,290
QSI Dental Division ⁽¹⁾	7,289		7,289
Total goodwill	$	188,837	$	188,837

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⁽¹⁾ QSI Dental Division goodwill is presented on a basis consistent with that of our management reporting structures. However, for the purposes of our annual assessment of goodwill for impairment and as otherwise may be required, the QSI Dental Division goodwill is allocated to the reporting units that derive cash flows from the products associated with the acquired goodwill. For all periods presented in this report, the allocation resulted in substantially all of the QSI Dental Division goodwill being ascribed to the NextGen Division.