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Goodwill and Other Identifiable Intangible Assets, Net
 9 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Amortizable intangible assets were (in thousands):
 June 30, 2020September 30, 2019
Gross
carrying
amount		Accum.
amort.		NetGross
carrying
amount		Accum.
amort.		Net
Purchased and core technology$75,728  $(54,030) $21,698  $57,699  $(50,986) $6,713  
License agreements112  (105) 7  102  (74) 28  
Patents and trademarks22,748  (13,111) 9,637  14,577  (11,970) 2,607  
Customer relationships125,300  (31,593) 93,707  46,315  (25,266) 21,049  
Non-compete agreements600  (420) 180  600  (330) 270  
Order backlog1,800  (1,800) —  1,800  (1,800) —  
Total$226,288  $(101,059) $125,229  $121,093  $(90,426) $30,667  
Amortization expense was $4.1 million and $2.1 million for the three months ended June 30, 2020 and 2019, respectively, and $10.7 million and $6.7 million for the nine months ended June 30, 2020 and 2019, respectively. Amortization expense is recorded on our condensed consolidated statements of operations within cost of sales and in general and administrative expense.
6. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED)
Estimated amortization expense related to intangible assets for the remainder of fiscal 2020 and the five succeeding fiscal years is (in thousands):
2020 (three months)$4,065  
2021$15,555  
2022$14,711  
2023$12,518  
2024$11,815  
2025$8,358  
The changes in the carrying amount of goodwill by reportable segments are (in thousands):
 Nine months ended June 30,
 IoT
Products and Services		IoT
Solutions		Total
Balance on September 30, 2019$103,519  $49,903  $153,422  
Acquisitions53,606  —  53,606  
Foreign currency translation adjustment20  (355) (335) 
Balance at June 30, 2020$157,145  $49,548  $206,693  
Goodwill represents the excess of cost over the fair value of net identifiable assets acquired. Goodwill is tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. For our quantitative goodwill impairment tests, we determine the estimated fair value of each reporting unit and compare it to the carrying value of the reporting unit, including goodwill. If the carrying amount of a reporting unit is higher than its estimated fair value, then an impairment loss must be recognized for the excess. Both of our operating segments constitute separate reporting units and both units were tested individually for impairments.
The fair value of each reporting unit is determined using a weighted combination of an income and market approach. A discounted cash flow ("DCF") method is utilized for the income approach. In developing the discounted cash flow analysis, our assumptions about future revenues, expenses, capital expenditures, and changes in working capital are based on management's projections, and assume a terminal growth rate thereafter. A separate discount rate is determined for each reporting unit and these cash flows are then discounted to determine the fair value of the reporting unit. The market approach determines a value derived from the guideline company method. This market approach method estimates the price reasonably expected to be realized from the sale of the reporting unit based on comparable companies.
Assumptions and estimates to determine fair values under the income and market approaches are complex and often subjective. They can be affected by a variety of factors. These include external factors such as industry and economic trends. They also include internal factors such as changes in our business strategy and our internal forecasts. We believe we made a reasonable estimate with the assumptions used to calculate the fair values of our two reporting segments. Changes in circumstances or a potential event could negatively affect the estimated fair values. We will continue to monitor potential COVID-19 industry and demand impacts as this could potentially affect our cash flows and market capitalization. If our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units, we may be required to record future impairment charges for goodwill.
Results of our Fiscal 2020 Annual Impairment Test
As of June 30, 2020, we had a total of $157.1 million of goodwill for the IoT Products & Services reporting unit and $49.6 million of goodwill for the IoT Solutions reporting unit. At June 30, 2020, fair value exceeded the carrying value by more than 10% for both reporting units. Implied fair values for both reporting units were each calculated on a standalone basis using a weighted combination of the income approach and market approach. The implied fair values of each reporting unit were added together to get an indicated value of total equity to which a range of indicated value of total equity was derived. This range was compared to the total market capitalization of $338.2 million as of June 30, 2020. This implied a range of control premiums of 17.0% to 29.1%. This range of control premiums fell below the control premiums observed in the last five years in the communications equipment industry. As a result, the market capitalization reconciliation analysis proved support for the reasonableness of the fair values estimated for each individual reporting unit.