Note 6 - Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

6.

Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions.

The Company's Goodwill balance is

$115.8

 million as of

March 31, 2020

and

$109.8

 million as of

December 31,

2019

. The Company's goodwill relates

93%

 (

$107.7

 million) to its Domain Services operating segment and

7%

 (

$8.1

 million) to its Network Access Services operating segment.

Goodwill is

not

amortized, but is subject to an annual impairment test, or more frequently if impairment indicators are present.

No

impairment was recognized during the

three

months ended

March 31, 2020

and

2019

.

Other Intangible Assets:

Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are

not

amortized but are subject to impairment assessments performed throughout the year. As part of the normal renewal evaluation process during the periods ended

March 31, 2020 

and

March 

31,

2019,

the Company assessed that certain domain names that were originally acquired in the

June 2006

acquisition of Mailbank.com Inc. that were up for renewal, should

not

be renewed.   

Intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of

two

 to

fifteen

years.

Acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			3 - 7 years			2 - 7 years			15 years
Balances, December 31, 2019	$	11,166		$	1,144		$	9,091		$	34,268		$	1,516		$	469		$	57,654
Cedar Networks acquisition (Note 4 (b))		-			-			-			4,630			-			945			5,575
Additions to/(disposals from) domain portfolio, net		(4	)		(9	)		-			-			-			-			(13	)
Amortization expense		-			-			(518	)		(2,429	)		(327	)		(27	)		(3,301	)
Balances, March 31, 2020	$	11,162		$	1,135		$	8,573		$	36,469		$	1,189		$	1,387		$	59,915

The following table shows the estimated amortization expense for each of the next

5

years, assuming

no

further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):

	Year ending
	December 31,
Remainder of 2020	$	8,054
2021		12,152
2022		11,208
2023		9,180
2024		2,644
Thereafter		4,380
Total	$	47,618