Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

7. Goodwill and Intangible Assets

Goodwill

The following table summarizes the carrying amount of goodwill resulting from the Acquisition of 3VR (in thousands):

	Premises		Credentials		Identity		All Other		Total
Balance at December 31, 2017	$	—	$	—	$	—	$	—	$	—
Acquisition of business		5,880		—		—		—		5,880
Goodwill impairment during the period		—		—		—		—		—
Balance at March 31, 2018	$	5,880	$	—	$	—	$	—	$	5,880

In accordance with its accounting policy and ASC 350, the Company tests goodwill with indefinite lives annually for impairment and assesses whether there are any indicators of impairment on an interim basis. The Company performs interim goodwill impairment reviews between its annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. The Company believes the methodology that it uses to review impairment of goodwill, which includes a significant amount of judgment and estimates, provides it with a reasonable basis to determine whether impairment has occurred. However, many of the factors employed in determining whether its goodwill is impaired are outside of its control and it is reasonably likely that assumptions and estimates will change in future periods. These changes in assumptions and estimates could result in future impairments. During the quarter ended March 31, 2018, the Company noted no indicators of goodwill impairment and concluded no further testing necessary.

Intangible Assets

The following table summarizes the gross carrying amount and accumulated amortization for intangible assets resulting from acquisitions (in thousands):

				Developed			Customer
	Trademarks			Technology			Relationship			Total
Amortization period (in years)	5			10 – 12			4 – 12

Gross carrying amount at December 31, 2017	$	—		$	4,600		$	10,639		$	15,239
Accumulated amortization		—			(3,257	)		(7,617	)		(10,874	)

Intangible Assets, net at December 31, 2017	$	—		$	1,343		$	3,022		$	4,365

Gross carrying amount at March 31, 2018	$	400		$	7,600		$	13,539		$	21,539
Accumulated amortization		(10	)		(3,406	)		(7,906	)		(11,322	)

Intangible Assets, net at March 31, 2018	$	390		$	4,194		$	5,633		$	10,217

Each period, the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. If a revision to the remaining period of amortization is warranted, amortization is prospectively adjusted over the remaining useful life of the intangible asset. Intangible assets subject to amortization are amortized over their useful lives as shown in the table above. The Company evaluates its amortizable intangible assets for impairment at the end of each reporting period. The Company did not identify any impairment indicators during the three months ended March 31, 2018.

The following table illustrates the amortization expense included in the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017, respectively (in thousands):

	Three Months Ended
	March 31,
	2018		2017
Cost of revenue	$	149	$	112
Selling and marketing		298		252
Total	$	447	$	364

The estimated annual future amortization expense for purchased intangible assets with definite lives as of March 31, 2018 is as follows (in thousands):

2018 (remaining nine months)	$	1,594
2019		2,125
2020		2,125
2021		670
2022		670
Thereafter		3,033
Total	$	10,217

- 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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