GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Mar. 31, 2018

Goodwill and Other Intangible Assets [Abstract]

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and indefinite-lived intangible assets

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets of acquired businesses. Indefinite-lived intangibles are intangible assets whose useful lives are indefinite in that their lives extend beyond the foreseeable horizon – that is there is no foreseeable limit on the period of time over which they are expected to contribute to the cash flows of the reporting entity. The Company accounts for these items in accordance with FASB’s ASC 350 Intangibles – Goodwill and Other. This requires that goodwill and intangible assets having indefinite lives are not amortized but instead are reviewed annually, or more frequently as a result of an event or change in circumstances, for possible impairment with impaired assets written down to fair value. Goodwill, assembled workforce and Angoss trade names are considered indefinite-lived intangibles. The Company conducts its annual impairment test for goodwill and indefinite-lived intangible assets during the fourth quarter of each fiscal year.

The following table presents the changes in the carrying amount of goodwill and indefinite lived intangibles (in thousands):



	Amount

Balance as of September 30, 2017	$ 6,685
Goodwill acquired during the year	11,509
Indefinite lived trade names acquired during the year	3,200
Balance as of March 31, 2018	$ 21,394

Acquired Intellectual Property

Acquired intellectual property consists of software source code acquired through business combinations in prior years. The acquired intellectual property assets are being amortized to cost of software licenses using the straight-line method over the estimated life of the asset, ranging from five to eight years.

Acquired intellectual property, net, were comprised of the following at March 31, 2018 and September 30, 2017 (in thousands):


March 31, 2018
Identified	Weighted		Gross
Intangible	Average		Carrying		Accumulated		Net Carrying
Asset	Useful Life		Amount		Amortization		Amount
	(In years)

Intellectual property	8	$	15,020	$	(10,935)	$	4,085

September 30, 2017
Identified	Weighted		Gross
Intangible	Average		Carrying		Accumulated		Net Carrying
Asset	Useful Life		Amount		Amortization		Amount
	(In years)

Intellectual property	8	$	11,621	$	(10,734)	$	887

Amortization expense related to the acquired intellectual property assets charged to cost of software licenses for the three month period ended March 31, 2018 and 2017 was $0.1 million and $0.5 million, respectively. Amortization expense related to the acquired intellectual property assets charged to cost of software licenses for the six month period ended March 31, 2018 and 2017 was $0.2 million and $1.0 million, respectively.

The future amortization expense as of March 31, 2018 related to the acquired intellectual property is as follows (in thousands):



Fiscal Years Ending September 30,

2018	$	342
2019		684
2020		684
2021		533
2022		425
Thereafter		1,417
Total future amortization expense	$	4,085

Other Intangible Assets

Other intangible assets consist of trade names, patents and customer lists acquired through business combinations in prior years. The values allocated to these intangible assets are amortized using the straight-line method over the estimated useful life of the related asset.

Other intangible assets, net, were comprised of the following at March 31, 2018 and September 30, 2017 (in thousands):


March 31, 2018
Identified	Weighted		Gross
Intangible	Average		Carrying		Accumulated		Net Carrying
Asset	Useful Life		Amount		Amortization		Amount
	(In years)

Patents	20	$	160	$	(109)	$	51
Customer relationships	8		8,075		(2,854)		5,221
Trade names	-		120		(120)		-

Total		$	8,355	$	(3,083)	$	5,272


September 30, 2017
Identified	Weighted		Gross
Intangible	Average		Carrying		Accumulated		Net Carrying
Asset	Useful Life		Amount		Amortization		Amount
	(In years)

Patents	20	$	160	$	(105)	$	55
Customer relationships	14		3,574		(2,660)		914
Trade names	3		120		(120)		-

Total		$	3,854	$	(2,885)	$	969

Amortization expense related to other intangible assets charged to sales and marketing totaled $0.2 million and $21,000 for the three month period ended March 31, 2018 and 2017, respectively. Amortization expense related to other intangible assets charged to sales and marketing totaled $0.2 million and $42,000 for the six month period ended March 31, 2018 and 2017, respectively.

The future amortization expense as of March 31, 2018 related to other intangible assets is as follows (in thousands):


Fiscal Years Ending September 30,

2018	$	496
2019		992
2020		992
2021		992
2022		992
Thereafter		808
Total future amortization expense	$	5,272

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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