5. Supplemental financial information

Inventory consists of the following (in thousands):

	October 29, 2016		January 30, 2016
Wafers and other purchased materials	$	11,043	$	15,440
Work-in-process		3,712		2,885
Finished goods		5,429		8,384
Total inventory	$	20,184	$	26,709

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

	October 29, 2016		January 30, 2016
Prepayments for taxes	$	3,410	$	3,357
Deposits		205		3,200
Non-operating receivable		645		-
Prepayments for inventory		964		3,725
Prepayments for royalties		596		741
Other current assets		2,631		3,062
Total prepaid expenses and other current assets	$	8,451	$	14,085

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

	Estimated Useful Lives (years)			October 29 , 201 6			January 30 , 201 6
Software		2		$	49,765		$	40,411
Mask sets	1	-	5		17,821			14,130
Equipment	1	-	5		8,724			8,088
Office equipment and furniture		2			8,039			7,705
Leasehold improvements	1	-	6		2,126			2,089
Total					86,475			72,423
Less: Accumulated depreciation and amortization					(66,913	)		(58,337	)
Total software, equipment and leasehold improvements, net				$	19,562		$	14,086

Software, equipment and leasehold improvement depreciation and amortization expense was $2.5 million and $3.3 million for the three months ended October 29, 2016 and October 31, 2015, respectively, and was $8.6 million and $9.2 million for the nine months ended October 29, 2016 and October 31, 2015, respectively. We recorded impairment charges for mask sets and software related to design tools associated with discontinued products for the three and nine months ended October 29, 2016 of zero and $0.3 million, respectively, and for the three and nine months ended October 31, 2015 of $0.8 million and $1.8 million, respectively, which was recorded in operating expenses in the accompanying condensed consolidated statements of operations.

Accrued liabilities consist of the following (in thousands):

	October 29, 2016		January 30 , 201 6
License fees	$	5,537	$	5,181
Rebates		1,796		2,864
Income taxes payable, current portion		3,659		2,305
Royalties		2,225		1,469
Warranties		792		959
Deferred revenue		590		407
Other accrued liabilities		553		1,447
Total accrued liabilities	$	15,152	$	14,632

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

	Nine months ended October 29, 2016
Beginning balance	$	2,864
Charged as a reduction of revenue		3,499
Reversal of unclaimed rebates		(3	)
Payments		(4,564	)
Ending balance	$	1,796