10	.	GOODWILL AND INTANGIBLE ASSETS, net

		Goodwill

Summarized below is the movement in the carrying value of goodwill for the years ended June 30, 2018, 2017 and 2016:

		Gross			Accumulated			Carrying
		value			impairment			value
Balance as of July 1, 2015	$	166,437		$	-		$	166,437
Acquisition of Transact24 (Note 3)		6,024			-			6,024
Acquisition of Masterpayment (Note 3)		17,084			-			17,084
Foreign currency adjustment⁽¹⁾		(10,067	)		-			(10,067	)
Balance as of June 30, 2016		179,478			-			179,478
Acquisition of Malta FS (Note 3)		2,475			-			2,475
Foreign currency adjustment⁽¹⁾		6,880			-			6,880
Balance as of June 30, 2017		188,833			-			188,833
Acquisition of DNI (Note 3)		114,161			-			114,161
Impairment loss		-			(20,917	)		(20,917	)
Foreign currency adjustment⁽¹⁾		1,019			144			1,163
Balance as of June 30, 2018	$	304,013		$	(20,773	)	$	283,240

(1) – the foreign currency adjustment represents the effects of the fluctuations between the South African rand, Euro and the Korean won, and the U.S. dollar on the carrying value.

Goodwill associated with the acquisition of DNI, Transact24, Masterpayment and Malta FS represents the excess of cost over the fair value of acquired net assets. The DNI, Transact24, Masterpayment and Malta FS goodwill is not deductible for tax purposes. See Note 3 for the allocation of the purchase price to the fair value of acquired net assets. DNI has been allocated to the Company's Financial inclusion and applied technologies operating segment. Transact24, Masterpayment and Malta FS have all been allocated to the Company's International transaction processing operating segment.

Impairment loss

The Company assesses the carrying value of goodwill for impairment annually, or more frequently, whenever events occur and circumstances change indicating potential impairment. The Company performs its annual impairment test as at June 30 of each year. During the third quarter of fiscal 2018, the Company recognized an impairment loss of approximately $19.9 million related to goodwill allocated to the Masterpayment business within its international transaction processing operating segment as a result of changes to the operating model of Masterpayment. The Company also impaired goodwill of approximately $1.1 million during its June 2018 annual goodwill impairment assessment related to a business allocated to its South African transaction processing operating segment, which ceased trading during the year.

During the second quarter of fiscal 2018, the Company re-evaluated the operating performance and ongoing viability of Masterpayment's working capital financing and supply chain solutions offering and determined to exit this portion of its business. While the Company initially believed that it could scale this offering in the medium to long-term by focusing on customers and industries outside Masterpayment's initial target market, this standalone offering did not fit the Company's strategy of providing payment solutions and working capital to small and medium-sized merchants. In order to focus on the Company's stated international strategy, the Company decided to wind-down the working capital finance book issued to non-payment solutions customers. During the third quarter of fiscal 2018, the Company evaluated Masterpayment's business strategy and following the wind-down referred to above, it has determined that Masterpayment is unlikely to deliver the financial results or cash flows previously anticipated. The Company and two of Masterpayment's senior managers have agreed, by mutual consent, that with effect from the end of March 2018, the managers terminated their employment with Masterpayment in order to dedicate themselves to new professional tasks.

In order to determine the amount of goodwill impairment, the estimated fair value of the Company's Masterpayment business was allocated to the individual fair value of the assets and liabilities of Masterpayment as if it had been acquired in a business combination, which resulted in the implied fair value of the goodwill. The Company used a discounted cash flow model in order to determine the fair value of Masterpayment. The allocation of the fair value of Masterpayment required the Company to make a number of assumptions and estimates about the fair value of assets and liabilities where the fair values were not readily available or observable.

A further deterioration in the international transaction processing operating segment, or in any other of the Company's businesses, may lead to additional impairments in future periods.

Goodwill has been allocated to the Company's reportable segments as follows:

		South						Financial
		African			International			inclusion and
		transaction			transaction			applied			Carrying
		processing			processing			technologies			value
Balance as of July 1, 2015	$	24,579		$	115,519		$	26,339		$	166,437
Acquisition of Transact24 (Note 3)		-			6,024			-			6,024
Acquisition of Masterpayment (Note 3)		-			17,084			-			17,084
Foreign currency adjustment⁽¹⁾		(4,154	)		(2,442	)		(3,471	)		(10,067	)
Balance as of June 30, 2016		20,425			136,185			22,868			179,478
Acquisition of Malta FS (Note 3)		-			2,475			-			2,475
Foreign currency adjustment⁽¹⁾		2,706			1,910			2,264			6,880
Balance as of June 30, 2017		23,131			140,570			25,132			188,833
Acquisition of DNI (Note 3)		-			-			114,161			114,161
Impairment loss		(1,052	)		(19,865	)		-			(20,917	)
Foreign currency adjustment⁽¹⁾		(1,133	)		3,243			(947	)		1,163
Balance as of June 30, 2018	$	20,946		$	123,948		$	138,346		$	283,240

(1) – the foreign currency adjustment represents the effects of the fluctuations between the South African rand, Euro and the Korean won, and the U.S. dollar on the carrying value.

Intangible assets, net

Summarized below is the fair value of intangible assets acquired, translated at the exchange rate applicable as of the relevant acquisition dates, and the weighted-average amortization period:

			Weighted-
		Fair value as	Average
		of acquisition	Amortization
		date	period (in years)
Finite-lived intangible asset:

Acquired during the year ended June 30, 2018
DNI – customer relationships acquired	$	97,255	5.00– 15.00
DNI – software and unpatented technology		2,609	5.00
DNI – trademarks		4,139	5.00

Acquired during the year ended June 30, 2017
Pros Software – customer relationships		2,311	0.75
Malta FS – customer relationships		186	0.65
Malta FS – software and unpatented technology		147	1.25

Acquired during the year ended June 30, 2016
Transact24 – customer relationships		3,749	5.00
Masterpayment – customer relationships		6,595	5.00
Transact24 – software and unpatented technology		1,225	3.00
Masterpayment – software and unpatented technology		1,765	3.00
Masterpayment – trademarks		1,068	5.00

Indefinite-lived intangible asset:
Acquired during the year ended June 30, 2017
Malta FS – Financial institution license	$	745	n/a

On acquisition, the Company recognized deferred tax liabilities of approximately $29.1 million and $0.7 million related to the acquisition of intangible assets during the years ended June 30, 2018 and 2017, respectively.

The Company assesses the carrying value of intangible assets for impairment whenever events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. No intangible assets have been impaired during the years ended June 30, 2018, 2017, and 2016, respectively.

Summarized below is the carrying value and accumulated amortization of intangible assets as of June 30, 2018 and 2017:


		As of June 30, 2018							As of June 30, 2017
		Gross					Net		Gross					Net
		carrying		Accumulated			carrying		carrying Accumulated carrying
		value		amortization			value		value		amortization			value
Finite-lived intangible assets:
Customer relationships (1)	$	197,676	$	(76,237	)	$	121,439	$	99,209	$	(65,595	)	$	33,614
Software and unpatented
technology (1)		35,730		(32,342	)		3,388		33,273		(31,112	)		2,161
FTS patent		2,792		(2,792	)		-		2,935		(2,935	)		-
Exclusive licenses		4,506		(4,506	)		-		4,506		(4,506	)		-
Trademarks(1)		11,101		(5,589	)		5,512		6,972		(4,759	)		2,213
Total finite-lived intangible
assets		251,805		(121,466	)		130,339		146,895		(108,907	)		37,988
Indefinite-lived intangible assets:
Financial institution license		793		-			793		776		-			776
Total indefinite-lived
intangible assets		793		-			793		776		-			776
Total intangible assets	$	252,598	$	(121,466	)	$	131,132	$	147,671	$	(108,907	)	$	38,764

(1) Includes the intangible assets acquired as part of the DNI acquisition in June 2018, Pros Software acquisition in October 2016 and Malta FS acquisition in November 2016.

Amortization expense charged for the years to June 30, 2018, 2017 and 2016 was $11.8 million, $14.0 million, and $11.2 million, respectively.

Future estimated annual amortization expense for the next five fiscal years, assuming exchange rates prevailing on June 30, 2018, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as a result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors.

2019	$	22,126
2020		21,123
2021		15,283
2022		10,928
2023		10,928
Thereafter		49,951
Total future estimated amortization expense	$	130,339