Property and Equipment, net

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consists of the following:

		As of
	Estimated useful lives (Years)	December 31, 2021		December 31, 2020
Owned Assets:
Network equipment and computers	3-5	$	116,023	$	107,016
Software	3-5	101,884		99,708
Leasehold improvements	3-8	46,401		48,052
Office furniture and equipment	3-8	22,302		22,210
Motor vehicles	2-5	693		599
Buildings	30	1,070		1,089
Land	—	700		712
Capital work in progress	—	10,288		4,647
		299,361		284,033
Less: Accumulated depreciation and amortization		(213,699)		(191,629)
		$	85,662	$	92,404
Right-of-use assets under finance leases:*
Network equipment and computers		91		93
Leasehold improvements		1,229		817
Office furniture and equipment		787		255
Motor vehicles		578		688
		2,685		1,853
Less: Accumulated depreciation and amortization		(2,339)		(1,382)
		$	346	$	471
Property and equipment, net		$	86,008	$	92,875

*Depreciation on assets held under finance leases are computed using the straight-line method over the shorter of the asset's estimated useful lives or the lease term.

Capital work in progress represents advances paid towards acquisition of property and equipment and costs incurred on internally developed software, not yet ready to be placed in service.

During the years ended December 31, 2021 and 2020 there were no changes in estimated useful lives of property and equipment during the ordinary course of operations.

The depreciation and amortization expense, excluding amortization of acquisition-related intangibles recognized in the consolidated statements of income was as follows:

	Year ended December 31,
	2021		2020		2019
Depreciation and amortization expense	$	36,354	$	36,050	$	30,423

The effect of foreign exchange gain upon settlement of cash flow hedges recorded under depreciation and amortization, was as follows:

	Year ended December 31,
	2021		2020		2019
Effect of foreign exchange gains	$	524	$	51	$	212

Internally developed software costs, included under Software, was as follows:

	As of
	December 31, 2021		December 31, 2020
Cost	$	19,289	$	18,371
Less : Accumulated amortization	(10,226)		(5,998)
Internally developed software, net	$	9,063	$	12,373

The amortization expense on internally developed software recognized in the consolidated statements of income was as follows:

	Year ended December 31,
	2021		2020		2019
Amortization expense	$	4,253	$	4,894	$	2,745

As of December 31, 2021 and 2020, the Company believes no impairment exists because the long-lived asset's future undiscounted net cash flows expected to be generated exceeds its carrying value; however, there can be no assurances that long-lived assets will not be impaired in future periods. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any. It is reasonably possible that the judgments and estimates described above could change in future periods. The duration and severity of COVID-19 and continued market volatility is highly uncertain and, as such, the impact on undiscounted cash flows is subject to significant judgment and may cause variability in the Company’s assessment of the existence of any impairment.

During the year ended December 31, 2019, the Company performed an impairment test of its long-lived assets related to its Health Integrated business. Based on the results, the long-lived assets carrying value exceeded its fair value. The primary factor contributing to a reduction in the fair value is the wind down of the Health Integrated business, due to an anticipated reduction to the Company's estimated future cash flows. As a result of this analysis, the Company recognized impairment charges of $2,178 during the year ended December 31, 2019, to write down the carrying value of property and equipment to its fair value. This impairment charge was recorded in the consolidated statements of income under "Impairment and restructuring charges".