Rosetta Stone 2015 Annual Report Download - page 84
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Table of Contents
Amortization expense consisted of the following (in thousands):
Included in cost of revenue:
Cost of product revenue
$ 264
$ 377
$ —
Cost of subscription and service revenue
322
209
244
Total included in cost of revenue
586
586
244
Included in operating expenses:
Sales and marketing
2,804
3,677
1,028
Research and development
1,802
2,000
550
General and administrative
—
—
—
Total included in operating expenses
4,606
5,677
1,578
Total
$ 5,192
$ 6,263
$ 1,822
The following table summarizes the estimated future amortization expense related to intangible assets as of December 31, 2015 (in thousands):
2016
$ 4,630
2017
4,189
2018
3,576
2019
1,532
2020
1,282
Thereafter
2,428
Total
$ 17,637
The Company also routinely reviews indefinite-lived intangible assets and long-lived intangible assets for potential impairment as part of the
Company’s internal control framework. As an indefinite-lived intangible asset, the Rosetta Stone tradename was evaluated as of December 31, 2015 to
determine if indicators of impairment exist. The Company elected to bypass the option to first assess qualitative factors to determine whether it is more likely
than not that the Rosetta Stone trade name was impaired and performed the quantitative assessment. In the quantitative assessment, the Company noted that
the fair value of the Rosetta Stone trade name has declined from prior estimates of fair value due to the reduction in forecasted revenue and bookings from
both the Enterprise & Education Language and the Consumer Language reporting units, however, the fair value exceeds the carrying value. Additionally, all
long-lived intangible assets were evaluated to determine if indicators of impairment exist and the Company concluded that there are no potential indicators
of impairment. There were no impairment charges related to intangible assets for the years ended December 31, 2015, 2014 and 2013.
F-28