Annual report pursuant to Section 13 and 15(d)

Intangible Assets

v3.6.0.2
Intangible Assets
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets
INTANGIBLE ASSETS
The following table summarizes the components of gross and net intangible asset balances (in thousands): 
 
December 31, 2016
 
December 31, 2015
 
Gross
Carrying
Amount
 
Accumulated
Impairment
 
Accumulated
Amortization
 
Net Book
Value
 
Gross
Carrying
Amount
 
Accumulated
Impairment
 
Accumulated
Amortization
 
Net Book
Value
Technology
$
62,563

 

 
$
(34,683
)
 
$
27,880

 
$
63,668

 

 
$
(31,600
)
 
$
32,068

Customer related
38,087

 

 
(17,610
)
 
20,477

 
35,529

 

 
(14,352
)
 
21,177

Trade names
32,106

 
(3,290
)
 
(7,135
)
 
21,681

 
31,837

 
(3,340
)
 
(3,052
)
 
25,445

Internally developed software
16,978

 

 
(10,220
)
 
6,758

 
15,513

 

 
(8,155
)
 
7,358

Patents
2,620

 

 
(2,251
)
 
369

 
2,663

 

 
(2,175
)
 
488

Total Definite-lived intangible assets
152,354

 
(3,290
)
 
(71,899
)
 
77,165

 
149,210

 
(3,340
)
 
(59,334
)
 
86,536


Finite lived intangible assets are amortized over their weighted average lives, which are 13 years for patents, 17 years for technology, 11 years for customer-related intangibles, 7 years for trade names, and 5 years for internally developed software.
Internally developed software consists of $14.8 million relating to costs incurred for development of internal use computer software and $2.2 million for development of software to be sold.
During the year ended December 31, 2014 the Company recorded a charge of $0.6 million related to the impairment of the Grass trade name. This impairment was the result of deterioration of expected future cash flows. Impairments were determined by performing a discounted cash flow analysis on intangibles assets. This charge was recorded in Intangible amortization.
Amortization expense related to intangible assets with finite lives was as follows (in thousands): 
 
Years Ended December 31,
 
2016
 
2015
 
2014
Technology
$
3,407

 
$
3,916

 
$
3,993

Customer related
3,452

 
2,938

 
1,892

Trade names
4,115

 
3,159

 

Internally developed software
2,069

 
1,620

 
1,434

Patents
112

 
112

 
113

Total amortization
$
13,155

 
$
11,745

 
$
7,432


Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 
2017
$
13,130

2018
12,908

2019
11,753

2020
9,558

2021
8,270

Thereafter
21,546

Total expected amortization expense
$
77,165


During the second quarter of 2015 the Company initiated a strategy to increase the brand strength of Natus by replacing acquired product trade names with Natus branded products over time. The implementation of this strategy placed definite expected future lives on the acquired trade names which previously had indefinite lives. The Company assigned these trade names lives of seven years based on the timeline of the Company's branding strategy. The Company will continue to assess the lives of these assets based on the timing and execution of this strategy. Amortization expense for trade names is recorded as a component of operating expense.