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Goodwill And Intangible Assets, Net

12 Months Ended

Jun. 30, 2022

Goodwill And Intangible Assets, Net [Abstract]

10.Goodwill and intangible assets, net

Goodwill

Summarized below is the movement in the carrying value of goodwill for the years ended June 30, 2022, 2021 and 2020:

			Gross value		Accumulated impairment		Carrying value
Balance as of July 1, 2019		$	72,473	$	(35,157)	$	37,316
	Impairment loss		-		(5,589)		(5,589)
	Disposal of FIHRST (Note 3)		(599)		-		(599)
	Deconsolidation of CPS (Note 3)		(1,346)		1,346		-
	Foreign currency adjustment⁽¹⁾		(7,334)		375		(6,959)
Balance as of June 30, 2020			63,194		(39,025)		24,169
	Liquidation of subsidiaries⁽²⁾		(26,629)		26,629		-
	Foreign currency adjustment⁽¹⁾		6,384		(1,400)		4,984
Balance as of June 30, 2021			42,949		(13,796)		29,153
	Acquisition of Connect (Note 3)⁽³⁾		153,693		-		153,693
	Foreign currency adjustment⁽¹⁾		(21,166)		977		(20,189)
Balance as of June 30, 2022		$	175,476	$	(12,819)	$	162,657

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

(2) – The Company deconsolidated the goodwill and accumulated impairment related to entities it substantially liquidated during the year ended June 30, 2021.

(3) – Represents goodwill arising from the acquisition of Connect and translated at the foreign exchange rate applicable on the date the transaction became effective. This goodwill has been allocated to the merchant reportable operating segment.

Goodwill associated with the acquisition of Connect represents the excess of cost over the fair value of acquired net assets. Connect 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.

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. Except as discussed below, no goodwill has been impaired during the years ended June 30, 2022, 2021 and 2020, respectively.

Year ended June 30, 2020 goodwill impairment loss

During the third quarter of fiscal 2020, the Company performed an impairment analysis and recognized an impairment loss of $5.6 million, related to goodwill allocated to its EasyPay business within its merchant operating segment. The impairment loss resulted from a reassessment of the business’s growth prospects given the challenging economic environment in South Africa. The impairment is included within the caption impairment loss in the consolidated statement of operations for the year ended June 30, 2020.

In order to determine the amount of the EasyPay goodwill impairment, the estimated fair value of EasyPay’s business assets and liabilities were compared to the carrying value of its assets and liabilities. The Company used a discounted cash flow model in order to determine the fair value of EasyPay. Based on this analysis, the Company determined that the carrying value of EasyPay’s assets and liabilities exceeded their fair value at the reporting date.

In the event that there is a deterioration in the Company’s operating segments, or in any other of the Company’s businesses, this may lead to additional impairments in future periods.

10.Goodwill and intangible assets, net (continued)

Goodwill (continued)

Refer to Note 21 for additional information regarding changes to the Company’s reportable segments during the year ended June 30, 2022. Goodwill has been allocated to the Company’s reportable segments as follows:


		Consumer		Merchant		Other		Carrying value
Balance as of July 1, 2019		$	-	$	36,659	$	657	$	37,316
	Impairment loss		-		(5,589)		-		(5,589)
	Disposal of FIHRST (Note 3)		-		(599)		-		(599)
	Foreign currency adjustment⁽¹⁾		-		(6,959)		-		(6,959)
Balance as of June 30, 2020			-		23,512		657		24,169
	Liquidation of subsidiaries		-		-		-		-
	Foreign currency adjustment⁽¹⁾		-		4,984		-		4,984
Balance as of June 30, 2021			-		28,496		657		29,153
	Acquisition of Connect		-		153,693		-		153,693
	Foreign currency adjustment⁽¹⁾		-		(20,189)		-		(20,189)
Balance as of June 30, 2022		$	-	$	162,000	$	657	$	162,657

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

Intangible assets

Impairment loss

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. Except as discussed below, no intangible assets have been impaired during the years ended June 30, 2022, 2021 and 2020, respectively.

Year ended June 30, 2020 impairment loss

During the third quarter of fiscal 2020, the Company determined that its indefinite-lived intangible asset, a Maltese e-money license, of $0.7 million was impaired. The facts and circumstances leading up to the impairment include the losses incurred by the Company’s IPG business unit. In fiscal 2019, IPG formulated a plan to return to profitability, however, it missed a number of key deliverable deadlines and was reformulating its growth plans following the decision not to acquire a controlling stake in Bank Frick. The impairment is included within the caption impairment loss to the consolidated statement of operations for the year ended June 30, 2020. The intangible asset was not allocated to an operating segment and is included within corporate/ eliminations (refer to Note 21).

Summarized below is the carrying value and accumulated amortization of the intangible assets as of June 30, 2022, and June 30, 2021:

		As of June 30, 2022						As of June 30, 2021
			Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
Finite-lived intangible assets:
	Customer relationships⁽¹⁾	$	26,937	$	(9,140)	$	17,797	$	10,340	$	(10,340)	$	-
	Software, integrated platform and unpatented technology⁽¹⁾		127,785		(3,075)		124,710		1,726		(1,726)		-
	FTS patent		2,352		(2,352)		-		2,679		(2,679)		-
	Brands and trademarks ⁽¹⁾		16,018		(1,823)		14,195		2,015		(1,658)		357
	Total finite-lived intangible assets	$	173,092	$	(16,390)		156,702	$	16,760	$	(16,403)	$	357

(1) 2022 balances include the intangible assets acquired as part of the Connect acquisition in April 2022.

10.Goodwill and intangible assets, net (continued)

Intangible assets (continued)

Carrying value and amortization of intangible assets (continued)

Aggregate amortization expense on the finite-lived intangible assets for the years ended June 30, 2022, 2021 and 2020, was approximately $3.8 million, $0.4 million and $0.3, respectively.

Future estimated annual amortization expense for the next five fiscal years and thereafter, using the exchange rates that prevailed on June 30, 2022, 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.

Fiscal 2023		$	16,515
Fiscal 2024			16,516
Fiscal 2025			16,518
Fiscal 2026			16,518
Fiscal 2027			16,455
Thereafter			74,180
	Total future estimated annual amortization expense	$	156,702