Goodwill and Acquired Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

7. Goodwill and Acquired Intangible Assets

In February 2017, the Company completed the sale of its assets related to the Skyfence cloud access security broker business (“Skyfence”) to Forcepoint LLC and its Israeli subsidiary. The Company allocated goodwill of $1.1 million to the business being disposed of. Additionally, the acquired intangible assets with the carrying value of $4.5 million were derecognized in connection with this transaction. In December 2016, the Company completed the acquisition of Camouflage Software Inc., which $2.5 million was allocated to goodwill and $1.8 million to acquired intangible assets. The Company did not have any goodwill impairments during 2017, 2016 or 2015.

The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows (in thousands):

	2017			2016
Balance as of January 1	$	37,448		$	34,972
Goodwill with acquisition of Camouflage Software Inc.		-			2,476
Goodwill disposed with sale of Skyfence		(1,059	)		-
Balance as of December 31	$	36,389		$	37,448

Acquired intangible assets subject to amortization as of December 31, 2017 and 2016 were as follows (in thousands):

	As of December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Acquired Technology	$	3,753	$	(1,216	)	$	2,537
Customer relationships		480		(71	)		409
Trade name and other		280		(42	)		238
Total	$	4,513	$	(1,329	)	$	3,184


	As of December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Acquired Technology	$	11,718	$	(4,085	)	$	7,633
Customer relationships		480		-			480
Trade name and other		280		-			280
Total	$	12,478	$	(4,085	)	$	8,393

Amortization expense related to acquired intangible assets was $0.7 million for the year ended December 31, 2017. Acquired intangible assets are amortized over their estimated useful lives of 7 to 10 years. Acquired technology, customer relationships, and trade names and other have weighted-average remaining useful lives from the date of purchase of 6 years for all three categories. As of December 31, 2017, the Company expects amortization expense in future periods to be as follows (in thousands):

	Acquired
Fiscal Year	Intangibles
2018	$	528
2019		528
2020		528
2021		528
2022		528
Thereafter		544
Total expected amortization expense	$	3,184

- 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.

+ References + Details