Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Other Intangible Assets [Abstract]

(4)	Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the three months ended March 31, 2015, are as follows:

	Total		Merge Healthcare		Merge DNA

Balance at December 31, 2014	$	214,374	$	194,115	$	20,259
Increase due to DR Systems acquisition		52,889		52,889		-
Balance at March 31, 2015	$	267,263	$	247,004	$	20,259

Other Intangible Assets

The following is a summary of intangible assets subject to amortization:

			March 31, 2015				December 31, 2014
	Weighted Average Remaining Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Purchased software and technology		7.9	$	61,137	$	22,872	$	32,497	$	21,706
Capitalized software		4.5		6,244		2,261		5,852		2,058
Customer relationships		8.5		61,284		28,836		43,664		27,440
Backlog		0.0		8,100		8,100		8,100		8,100
Trade names		4.6		1,883		821		1,463		764
Non-competes		2.5		3,379		2,183		3,099		2,066
Total			$	142,027	$	65,073	$	94,675	$	62,134

Estimated aggregate amortization expense for our intangible assets, which are expected to become fully amortized in 2027, is as follows:

For the remaining nine months of the year ending December 31:	2015	$	11,061
For the year ending December 31:	2016		13,392
2017			11,068
2018			8,806
2019			6,914
Thereafter			25,713
Total		$	76,954

In the three months ended March 31, 2015, we increased the gross carrying amount of purchased software and technology, customer relationships, trades names, and non-competes by $28,640, $17,620, $420 and $280, respectively, in conjunction with the acquisition of DR Systems. For the three months ended March 31, 2015, we also added $393 in capitalized software.

Amortization expense is set forth in the following table:

	Three Months Ended March 31,
	2015		2014
Amortization included in cost of sales:
Purchased software and technology	$	1,166	$	1,258
Capitalized software		204		43
Backlog		-		58
Subtotal		1,370		1,359

Amortization included in operating expenses:
Customer relationships		1,396		1,758
Trade names		57		40
Non-competes		116		115
Subtotal		1,569		1,913
Total amortization	$	2,939	$	3,272

- 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.

+ References+ Details