GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the nine-month period ended September 30, 2018 were as follows:



	Codman Specialty Surgical			Orthopedics and Tissue Technologies			Total
	(In thousands)
Goodwill at December 31, 2017	$	634,767		$	303,138		$	937,905
Codman acquisition measurement period adjustments	(3,964		)	—			(3,964		)
Foreign currency translation	(5,114		)	(2,458		)	(7,572		)
Goodwill at September 30, 2018	$	625,689		$	300,680		$	926,369

The components of the Company’s identifiable intangible assets were as follows:



	September 30, 2018
	Weighted Average Life	Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Completed technology	19 years	$	855,799	$	(156,157	)	$	699,642
Customer relationships	13 years	232,083		(102,618		)	129,465
Trademarks/brand names	28 years	104,347		(24,903		)	79,444
Codman trade name	Indefinite	162,900		—			162,900
Supplier relationships	27 years	34,721		(16,162		)	18,559
All other	4 years	11,019		(3,770		)	7,249
		$	1,400,869	$	(303,610	)	$	1,097,259



	December 31, 2017
	Weighted Average Life	Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Completed technology	19 years	$	869,174	$	(124,096	)	$	745,078
Customer relationships	13 years	233,430		(91,961		)	141,469
Trademarks/brand names	28 years	104,879		(22,293		)	82,586
Codman trade name	Indefinite	162,900		—			162,900
Supplier relationships	27 years	34,721		(15,092		)	19,629
All other	4 years	11,511		(3,546		)	7,965
		$	1,416,615	$	(256,988	)	$	1,159,627

Goodwill and Intangible Assets with Indefinite Lives

The Company tests goodwill and intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC Topic 350. Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or indefinite lived intangible asset below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.

The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative assessment for some or all of its reporting units and perform a quantitative test.

For goodwill, the Company elected to bypass the qualitative assessment for its three reporting units and perform a quantitative test during the third quarter of 2018. In performing this test, the Company utilized a discount rate of 9.0%. The assumptions used in evaluating goodwill for impairment are subject to change and are tracked against historical results by management. Based on the results of this quantitative test, the Company recorded no impairment of goodwill.

For intangible assets with indefinite lives, the Company elected to bypass the qualitative assessment for its Codman Tradename intangible asset and perform a quantitative test during the third quarter 2018. In performing this test, the Company utilized a discount rate of 13.0%. The assumptions used in evaluating the Codman Tradename for impairment are subject to change and are tracked against historical results by management. Based on the results of the quantitative test, the Company recorded no impairment to the Codman Tradename intangible asset.

Definite Lived Intangible Assets

Product rights and other definite-lived intangible assets are tested periodically for impairment in accordance with ASC Topic 360 when events or changes in circumstances indicate that an asset’s carrying value may not be recoverable. The impairment testing involves comparing the carrying amount of the asset or asset group to the forecasted undiscounted future cash flows. In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and an impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using discounted future cash flows. The computed impairment loss is recognized in the period that the impairment occurs.

During the third quarter of 2018, the Company recorded an impairment charge of $4.9 million in cost of goods sold related to completed technology assets acquired from Koby Ventures II, L.P dba Metasurg ("Metasurg Technology") due to recent contract negotiations and revised future projections. The remaining net book value of these intangible assets total $2.3 million as of September 30, 2018. Metasurg Technology is included in the Orthopedic and Tissue Technology segment. Of the total impairment charge of $4.9 million, $2.5 million was related to an out-of-period adjustment included in the three and nine months ended September 30, 2018. The out-of-period adjustment is attributed to the timing of performing the impairment test based on the contract termination associated with the intangible asset. The Company determined that the adjustment was not material to the consolidated financial statements for any previously reported annual or interim period and the adjustment to correct the misstatements is not material to the three or nine months ended September 30, 2018.

During the third quarter of 2017, the Company recorded an impairment charge of $3.3 million in cost of goods sold related to completed technology assets acquired from Tarsus Medical, Inc. ("Tarsus Technology"), since the underlying product will no longer be sold. Tarsus Technology was included in the Orthopedic and Tissue Technology segment.

Based on quarter-end exchange rates, annual amortization expense (including amounts reported in cost of product revenues, but excluding any possible future amortization associated with acquired IPR&D) is expected to be approximately $71.6 million in 2018, $66.4 million in 2019, $66.2 million in 2020, $65.2 million in 2021, $61.7 million in 2022, $60.8 million in 2023 and $599.3 million thereafter. Identifiable intangible assets are initially recorded at fair market value at the time of acquisition using an income or cost approach.