5. Supplemental financial information

Inventory consists of the following (in thousands):

	July 30, 2016		January 30, 2016
Wafers and other purchased materials	$	11,012	$	15,440
Work-in-process		4,770		2,885
Finished goods		5,671		8,384
Total inventory	$	21,453	$	26,709

Prepaid expenses and other current assets consist of the following (in thousands):

	July 30, 2016		January 30, 2016
Prepayments for taxes	$	3,408	$	3,357
Deposits		208		3,200
Non-operating receivable		905		-
Prepayments for inventory		965		3,725
Prepayments for royalties		636		741
Other current assets		2,933		3,062
Total prepaid expenses and other current assets	$	9,055	$	14,085

Software, equipment and leasehold improvements consist of the following (in thousands):

	Estimated Useful Lives (years)			July 30 , 201 6			January 30 , 201 6
Software		2		$	48,894		$	40,411
Mask sets	1	-	5		14,710			14,130
Equipment	1	-	5		8,458			8,088
Office equipment and furniture		2			7,975			7,705
Leasehold improvements	1	-	6		2,112			2,089
Total					82,149			72,423
Less: Accumulated depreciation and amortization					(64,490	)		(58,337	)
Total software, equipment and leasehold improvements, net				$	17,659		$	14,086

Software, equipment and leasehold improvement depreciation and amortization expense was $2.7 million and $3.0 million for the three months ended July 30, 2016 and August 1, 2015, respectively, and was $6.1 million and $5.9 million for the six months ended July 30, 2016 and August 1, 2015, respectively. We recorded impairment charges for mask sets and software related to design tools associated with discontinued products for both the three and six months ended July 30, 2016 of $0.3 million, and for both the three and six months ended August 1, 2015 of $1.0 million, which was recorded in operating expenses in the accompanying condensed consolidated statements of operations.

Accrued liabilities consist of the following (in thousands):

	July 30, 2016		January 30 , 201 6
License fees	$	10,374	$	5,181
Rebates		2,401		2,864
Income taxes payable, current portion		3,431		2,305
Royalties		2,717		1,469
Warranties		952		959
Deferred revenue		501		407
Other accrued liabilities		1,001		1,447
Total accrued liabilities	$	21,377	$	14,632

The following table summarizes activity related to accrued rebates (in thousands):

	Three Months Ended						Six Months Ended
	July 30 , 201 6			August 1, 2015			July 30 , 201 6			August 1, 2015
Beginning balance	$	3,925		$	7,142		$	2,864		$	9,599
Charged as a reduction of revenue		629			2,430			3,073			6,551
Reversal of unclaimed rebates		(3	)		(221	)		(3	)		(1,028	)
Payments		(2,150	)		(4,433	)		(3,533	)		(10,204	)
Ending balance	$	2,401		$	4,918		$	2,401		$	4,918