GOODWILL AND INTANGIBLES

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill represents the excess of cost over the fair value of identifiable net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead is tested for impairment annually in the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate that impairment may have occurred. As of both September 30, 2017 and December 31, 2016, the Company had $69.3 million of goodwill.

The following table summarizes the carrying value of intangible assets:



	As of
	September 30, 2017			December 31, 2016

Contractual rights	$	28,017		$	28,017
Accumulated amortization	(12,677		)	(9,675		)
Intangible assets, net	$	15,340		$	18,342

Amortization expense associated with the Company’s intangible assets was $1.0 million for both the three months ended September 30, 2017 and 2016, respectively, and $3.0 million for both the nine months ended September 30, 2017 and 2016. Amortization expense is estimated to be $1.0 million for the remaining three months of 2017, $4.0 million per annum for each of the years ending December 31, 2018 through 2020 and $2.3 million for 2021.

Goodwill and intangible assets are included in other assets in the condensed consolidated statements of financial position.

On July 13, 2017, Oaktree Capital Management, L.P. (“OCM”), an indirect subsidiary of the Company, entered into a definitive asset purchase agreement providing for the entry by OCM into new investment advisory agreements with two business development companies: Fifth Street Finance Corp. (NASDAQ: FSC) and Fifth Street Senior Floating Rate Corp. (NASDAQ: FSFR). The transaction contemplated by the asset purchase agreement closed on October 17, 2017, at which time OCM paid $320 million in cash to Fifth Street Management LLC (“FSM”), net of certain transaction-related expenses, for all of FSM’s right, title and interest in specified business records related to FSM’s then-existing investment advisory agreements with each of FSC and FSFR. Upon closing, FSC changed its name to Oaktree Specialty Lending Corporation (NASDAQ: OCSL) and FSFR changed its name to Oaktree Strategic Income Corporation (NASDAQ: OCSI). The transaction will be accounted for as an asset acquisition and the majority of the consideration transferred is expected to be allocated to amortizable intangible assets.

- 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