Property and Equipment

Property and equipment consisted of the following as of:



	December 31, 2017			December 31, 2016
	(in thousands)
Machinery and equipment	$	15,752		$	15,345
Software	24,120			20,381
Software development-in-progress (1)	1,235			584
Furniture and fixtures	971			1,239
Leasehold improvements	3,012			2,900
	45,090			40,449
Less: accumulated depreciation	(34,050		)	(29,591		)
Less: held for sale, net	—			(247		)
Property and equipment, net	$	11,040		$	10,611


(1)	Includes costs associated with software projects which are still in the application development stage as of December 31, 2017 and 2016 and as such, are not being amortized.

Depreciation of property and equipment for the years ended December 31, 2017 and 2016 was $5.5 million and $4.8 million, respectively. During the year ended December 31, 2017, we had retirements that reduced both our property and equipment and accumulated depreciation balances by $318 thousand. During the year ended December 31, 2016, we had retirements that reduced our property and equipment and accumulated depreciation balances by $3.4 million and $2.3 million, respectively, and we recorded impairments of property and equipment that reduced our property and equipment and accumulated depreciation balances by $17 thousand and $1 thousand, respectively.

We record internally developed capitalized software as a component of software in property and equipment in our consolidated balance sheets, and as such, we record depreciation for internally developed capitalized software in depreciation expense in our consolidated statements of operations. We regularly review our capitalized software projects for impairment. We had no impairments of internally developed capitalized software in the years ended December 31, 2017 or 2016.

Internally developed capitalized software consisted of the following during the years ended December 31, 2017 and 2016 (in thousands):



	Gross Carrying Amount			Accumulated Depreciation			Net Carrying Amount
Balance at December 31, 2015	$	10,441		$	(5,888	)	$	4,553
Additions	5,179			—			5,179
Disposals	(605		)	434			(171		)
Depreciation expense	—			(2,477		)	(2,477		)
Balance at December 31, 2016	15,015			(7,931		)	7,084
Additions	3,588			—			3,588
Depreciation expense	—			(3,898		)	(3,898		)
Balance at December 31, 2017	$	18,603		$	(11,829	)	$	6,774

Depreciation expense for the future periods related to capitalized software no longer in the application development stage is indicated below (in thousands):



For the years ending December 31:
2018	$	3,596
2019	2,602
2020	576
Total	$	6,774

Leased property consisting of machinery and equipment held under capital leases and included in property and equipment consisted of the following as of:



	December 31, 2017			December 31, 2016
	(in thousands)
Leased property consisting of machinery and equipment	$	2,188		$	2,093
Less: accumulated depreciation	(1,356		)	(737		)
Leased property, net	$	832		$	1,356

During the year ended December 31, 2017, we did not enter into any new capital lease arrangements for fixed assets. During the year ended December 31, 2016, we entered into additional capital leases for fixed assets with acquisition values of approximately $884 thousand. In the year ended December 31, 2017, we had no disposals of fixed assets. In the year ended December 31, 2016, we disposed of fixed assets, primarily fulfillment equipment, subject to capital lease with an acquisition value of $1.7 million and accumulated depreciation of $1.0 million.