Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

Goodwill was recorded in connection with the September 2011 acquisition of MPC Data, Ltd. (renamed BSQUARE EMEA, Ltd. in 2015), a United Kingdom based provider of software engineering services. The excess of the acquisition consideration over the fair value of net assets acquired was recorded as goodwill and is included within the professional engineering services (“PES”) reporting unit.

For 2018, we performed our annual goodwill assessment in the fourth quarter of 2018.  We chose to forego performing the qualitative assessment and proceeded directly to performing the quantitative impairment test by comparing the fair value of our PES reporting unit with its carrying value, including goodwill, recording an impairment charge for the excess.  When performing the assessment, we determined the fair value of our PES reporting unit based on our forecast of future revenue and expense cash flow streams.   Based on the uncertainty of future sales for new PES services and the results of this assessment, we determined that the carrying value of goodwill was impaired.  As a result, an impairment charge of $3.7 million was recorded.                                              

For 2017, we performed our annual impairment assessment in the fourth quarter of 2017; no impairment was indicated and there was no change to the carrying amount of goodwill.

The carrying value of goodwill consisted of the following (in thousands):

						Net Carrying
	Cost		Impairment Loss			Value
Reconciliation of Goodwill carrying amount:
Balance at December 31, 2018	$	3,738	$	(3,738	)	$	-
Balance at December 31, 2017	$	3,738	$	-		$	3,738

Intangible assets relate to customer relationships that we acquired from TestQuest, Inc. in November 2008 and from the acquisition of BSQUARE EMEA, Ltd. in September 2011 and were as follows (in thousands):

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Value
Customer relationships:
Balance as of December 31, 2018	$	1,275	$	(1,008	)	$	267
Balance as of December 31, 2017	$	1,275	$	(910	)	$	365

Amortization expense was $98,000 for both 2018 and 2017. Amortization expense in future periods is expected to be as follows (in thousands):

2019		98
2020		98
2021		71
Total	$	267