Long-Lived Assets and Goodwill

3 Months Ended

Mar. 31, 2021

Long Lived Assets And Goodwill [Abstract]

LONG-LIVED ASSETS AND GOODWILL

14. LONG-LIVED ASSETS AND GOODWILL

The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets. This accounting standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

The Company accounts for goodwill and intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other. Goodwill represents the excess of the purchase price of an entity over the estimated fair value of the assets acquired and liabilities assumed. ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. During the fourth quarter of 2020, the Company adopted ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The adoption of this standard had no material impact on the Condensed Consolidated Financial Statements. During the three months ended March 31, 2021 and 2020, the Company recorded no impairments.

The Company accounts for software costs in accordance with the provisions of ASC 985-20 – Costs of Software to be Sold, Leased, or Marketed. ASC 985-20 provides guidance on costs for software that is internally developed or purchased, including software to be either sold as a separate product or as part of a product or process. Costs incurred to establish technological feasibility of the software should be expensed as research and development when incurred, regardless of whether it is internally developed or purchased. Once technological feasibility has been achieved, the remaining costs incurred to develop the software should be capitalized. These costs should continue to be capitalized until the product is ready to be sold or marketed to customers, at which time, amortization of the capitalized costs begin.

The following table sets forth the changes in the carrying amount of goodwill for the three months ended March 31, 2021:

(Amounts in US$’s)	Total
Balance at December 31, 2020	$	64,898,222
2021 Acquisitions		22,641,774
Balance at March 31, 2021	$	87,539,996

The following table sets forth the gross carrying amounts and accumulated amortization of the Company’s intangible assets as of March 31, 2021 and December 31, 2020:

(Amounts in US$’s)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Definite-lived intangible assets:
Trade names	$	5,973,204	$	(1,349,698	)	$	4,623,506
Licenses		350,000		(33,871	)		316,129
Technology		39,350,000		(10,303,516	)		29,046,484
Customer relationships		21,200,792		(5,484,917	)		15,715,875
Intellectual property		3,729,537		(673,389	)		3,056,148
Noncompete		937,249		(507,677	)		429,572
Total definite-lived intangible assets at December 31, 2020	$	71,540,782	$	(18,353,068	)	$	53,187,714
Trade names	$	5,973,204	$	(1,563,569	)	$	4,409,635
Licenses		350,000		(51,371	)		298,629
Technology		39,350,000		(11,942,848	)		27,407,152
Customer relationships		21,200,792		(6,543,392	)		14,657,400
Intellectual property		7,231,281		(907,856	)		6,323,425
Noncompete		937,249		(624,833	)		312,416
Capitalized software		1,771,040		(12,005	)		1,759,035
Total definite-lived intangible assets at March 31, 2021	$	76,813,566	$	(21,645,874	)	$	55,167,692

Amortization expense of intangible assets was $3,292,806 and $2,607,670 for the three months ended March 31, 2021 and 2020, respectively. The Company’s amortization is generally based on no residual value using the straight-line amortization method as it best represents the benefit of the intangible assets. However, capitalized software is amortized using greater of the (1) the net realizable value test, which is based on the proportion of current gross revenues to the total of current and estimated future gross revenues for the project or (2) straight-line amortization. The following table sets forth the weighted-average amortization period, in total and by major intangible asset class:

Asset Class	Weighted- Average Amortization period
Trade names		6.8 years
Licenses		5.0 years
Technology		6.0 years
Customer relationships		5.7 years
Intellectual property		6.7 years
Noncompete		2.0 years
Capitalized software		4.8 years
All Intangible assets		6.0 years

As of March 31 2021, assuming no additional amortizable intangible assets, the expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter was as follows:

(Amounts in US$’s)	Estimated
Remainder of 2021	$	9,728,681
2022		12,846,684
2023		12,762,335
2024		10,651,778
2025		5,290,510
2026		2,396,458
Thereafter		1,491,246