Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Note 8—Goodwill and Other Intangible Assets

Goodwill and acquired intangible assets are initially recorded at fair value and tested periodically for impairment. We perform an impairment test of goodwill during the fourth quarter of each fiscal year or sooner, if indicators of potential impairment arise.

At March 31, 2018, the carrying value of goodwill for all of our reporting units was $205.4 million, and the carrying value of goodwill in our Intellinx reporting unit was $4.4 million, which we believe to be at a heightened risk of impairment. Please refer to Note 7. Goodwill and Other Intangible Assets to our consolidated financial statements included in Item 8 of our Annual Report in Form 10-K for the fiscal year ended June 30, 2017 for more information regarding our accumulated impairment losses and goodwill balances.

Effective July 1, 2017, we adopted an accounting standard update requiring that software be classified as an intangible asset rather than an element of property and equipment. Intangible asset information as of June 30, 2017 has been recast in the table that follows, to reflect this change.

The following tables set forth the information for intangible assets subject to amortization and for intangible assets not subject to amortization.


	As of March 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	206,583	$	(134,470	)	$	72,113		8.6
Core technology		131,630		(81,850	)		49,780		8.3
Other intangible assets		22,304		(17,065	)		5,239		5.4
Capitalized software development costs		18,796		(5,495	)		13,301		4.3
Software ⁽¹⁾		61,061		(31,640	)		29,421		4.6

Total	$	440,374	$	(270,520	)	$	169,854

Unamortized intangible assets:
Goodwill							205,362

Total intangible assets						$	375,216


	As of June 30, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	190,965	$	(122,698	)	$	68,267		8.7
Core technology		130,572		(74,452	)		56,120		8.8
Other intangible assets		20,591		(15,691	)		4,900		6.6
Capitalized software development costs		16,304		(3,423	)		12,881		5.0
Software ⁽¹⁾		54,489		(25,377	)		29,112		3.5

Total	$	412,921	$	(241,641	)	$	171,280

Unamortized intangible assets:
Goodwill							194,700

Total intangible assets						$	365,980

⁽¹⁾	Software includes purchased software and software developed for internal use.

Estimated amortization expense for the remainder of fiscal year 2018 and subsequent fiscal years for acquired intangible assets, capitalized software development costs and software is as follows:


	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2018	$	5,821	$	738	$	2,223
2019		20,708		2,955		7,992
2020		18,341		2,955		6,277
2021		16,569		2,955		4,002
2022		14,353		2,955		2,679
2023 and thereafter		51,340		97		3,562

Each period, for capitalized software development costs, we evaluate whether amortization expense using a ratio of revenue in the period to total expected revenue over the product’s expected useful life would result in greater amortization than as calculated under a straight-line methodology and, if that were to occur, amortization in that period would be accelerated accordingly.

The following table represents a rollforward of our goodwill balances, by reportable segment, as follows:


	Cloud Solutions		Banking Solutions		Payments and Transactional Documents		Other		Total
	(in thousands)
Balance at June 30, 2017 ⁽¹⁾	$	90,069	$	35,880	$	60,557	$	8,194	$	194,700
Goodwill acquired during the period		1,326		—		4,757		—		6,083
Impact of foreign currency translation		2,823		—		1,756		—		4,579

Balance at March 31, 2018⁽¹⁾	$	94,218	$	35,880	$	67,070	$	8,194	$	205,362

⁽¹⁾	Other goodwill balance is net of $7.5 million accumulated impairment losses.

There can be no assurance that there will not be impairment charges in future periods as a result of future impairment reviews. To the extent that future impairment charges occur it would likely have a material impact on our financial results.

- 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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