Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

5. Goodwill and Intangible Assets

Goodwill

The gross carrying amount of goodwill was as follows (in thousands):

Balance at December 31, 2015	$	8,469
Foreign currency translation adjustment		185
Purchase price allocation adjustment		(490	)
Balance at September 30, 2016	$	8,164

In September 2016, the Company filed its 2015 Netherlands tax return and finalized the purchase price accounting related to its acquisition of Aduro Biotech Europe (formerly known as BioNovion Holding B.V.) resulting in a measurement period adjustment to goodwill of $490,000.

Intangible assets

The gross carrying amounts and net book value of our intangible assets were as follows (in thousands):

	September 30, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Intangible assets with finite lives:
License agreement	$	11,087	$	508	$	10,579
Total intangible assets with finite lives		11,087		508		10,579
Acquired IPR&D assets		19,226		—		19,226
Total intangible assets	$	30,313	$	508	$	29,805

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Intangible assets with finite lives:
License agreement	$	10,786	$	89	$	10,697
Total intangible assets with finite lives		10,786		89		10,697
Acquired IPR&D assets		18,703		—		18,703
Total intangible assets	$	29,489	$	89	$	29,400

Intangible assets are carried at cost less accumulated amortization. The license agreement is being amortized over a period of 20 years and the amortization expense is recorded in operating expenses. The increase in the gross carrying amount of intangible assets as of September 30, 2016 compared to December 31, 2015 reflected a positive impact of foreign currency exchange which was primarily due to the strengthening of the Euro against the U.S. dollar.

Amortization expense was $138,000 and $415,000 for the three and nine months ended September 30, 2016, respectively. There was no amortization expense for the comparable periods in 2015. Based on finite-lived intangible assets recorded as of September 30, 2016, the estimated future amortization expense is as follows (in thousands):

Year Ending December 31,	Estimated Amortization Expense
2016 (remaining three months)	$	139
2017		554
2018		554
2019		554
2020		554

- 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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