Property and Equipment, net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consists of the following:

	Estimated useful lives	As of
	(Years)	September 30, 2022		December 31, 2021
Owned Assets:
Network equipment and computers	3-5	$	125,523	$	116,023
Software	2-5	106,738		101,884
Leasehold improvements	3-8	43,326		46,401
Office furniture and equipment	3-8	20,669		22,302
Motor vehicles	2-5	573		693
Buildings	30	978		1,070
Land	—	640		700
Capital work in progress	—	10,876		10,288
		309,323		299,361
Less: Accumulated depreciation and amortization		(229,813)		(213,699)
		$	79,510	$	85,662
Right-of-use assets under finance leases*:
Network equipment and computers		$	84	$	91
Leasehold improvements		1,030		1,229
Office furniture and equipment		666		787
Motor vehicles		636		578
		2,416		2,685
Less: Accumulated depreciation and amortization		(1,993)		(2,339)
		423		346
Property and equipment, net		$	79,933	$	86,008

*Depreciation on assets held under finance leases are computed using the straight-line method over the shorter of the assets 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 three and nine months ended September 30, 2022, 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 unaudited consolidated statements of income was as follows:

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Depreciation and amortization expense	$	10,137	$	9,283	$	29,182	$	26,936

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

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Effect of foreign exchange gain/(loss)	$	(126)	$	120	$	(64)	$	443

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

	As of
	September 30, 2022		December 31, 2021
Cost	$	29,015	$	19,289
Less : Accumulated amortization	(14,599)		(10,226)
Internally developed software, net	$	14,416	$	9,063

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

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Amortization expense	$	1,832	$	1,086	$	4,414	$	3,165

As of September 30, 2022 and December 31, 2021, 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 assurance 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, the asset’s residual value, if any, and estimates relating to the possible effects resulting from COVID-19. It is reasonably possible that the judgments and estimates described above could change in future periods.