Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2016

10. Goodwill and Intangible Assets

The changes in the carrying amounts of goodwill by operating segment during the fiscal years 2015 and 2016 are as follows (in thousands):

	Sally Beauty Supply			Beauty Systems Group			Total
Balance at September 30, 2014	$	91,332		$	445,009		$	536,341
Acquisitions		—			2,814			2,814
Foreign currency translation		(8,116	)		(6,670	)		(14,786	)

Balance at September 30, 2015	$	83,216		$	441,153		$	524,369
Acquisitions		—			12,797			12,797
Foreign currency translation		(3,674	)		(778	)		(4,452	)

Balance at September 30, 2016	$	79,542		$	453,172		$	532,714

The Company completed its annual assessment of goodwill for impairment during the fiscal quarter ended March 31, 2016. No impairment losses were recognized in the current or prior periods presented in connection with the Company's goodwill and each of the Company's reporting units passed by a significant margin in each period presented.

The Company also completed its annual assessment of intangible assets, other than goodwill and including indefinite-lived intangible assets, for impairment during the fiscal quarter ended March 31, 2016. No material impairment losses were recognized in the current or prior periods presented in connection with the Company's intangible assets.

The following table provides the carrying value for intangible assets with indefinite lives, excluding goodwill, and the gross carrying value and accumulated amortization for intangible assets subject to amortization by operating segment at September 30, 2016 and 2015 (in thousands):

	September 30, 2016									September 30, 2015
	Sally Beauty Supply			Beauty Systems Group			Total			Sally Beauty Supply			Beauty Systems Group			Total
Intangible assets with indefinite lives:
Trade names	$	17,732		$	26,194		$	43,926		$	19,289		$	27,210		$	46,499

Intangible assets subject to amortization:
Gross carrying amount		27,271			132,479			159,750			27,352			122,894			150,246
Accumulated amortization		(17,127	)		(93,586	)		(110,713	)		(14,991	)		(82,906	)		(97,897	)

Net book value		10,144			38,893			49,037			12,361			39,988			52,349

Total intangible assets, excluding goodwill, net	$	27,876		$	65,087		$	92,963		$	31,650		$	67,198		$	98,848

As described in Note 17, during the fiscal year ended September 30, 2016, intangible assets subject to amortization in the amount of $10.1 million were recorded by BSG in connection with several individually immaterial acquisitions. Amortization expense totaled $13.3 million, $14.3 million and $14.5 million for the fiscal years ended September 30, 2016, 2015 and 2014, respectively. As of September 30, 2016, future amortization expense related to intangible assets subject to amortization is estimated to be as follows (in thousands):

Fiscal Year:
2017	$	13,039
2018		11,513
2019		10,137
2020		7,346
2021		3,819
Thereafter		3,183

	$	49,037

The weighted average remaining amortization period for intangible assets subject to amortization is approximately 4.6 years.

- 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.

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