Intangible assets and goodwill

Intangible assets and goodwill

During the three and nine months ended October 31, 2014, the Company capitalized software development costs of $1.4 million and $3.8 million, respectively, and $343,000 and $948,000 for the three and nine months ended October 31, 2013, respectively, related to significant enhancements and upgrades to its proprietary system.

The gross carrying amount and associated accumulated amortization of intangible assets is as follows as of October 31, 2014 and January 31, 2014:



(in thousands)	October 31, 2014			January 31, 2014
Amortized intangible assets:
Capitalized software development costs	$	9,073		$	5,290
Software	4,532			3,351
Acquired intangible member assets	24,563			24,563
Intangible assets, gross	38,168			33,204
Accumulated amortization	(11,918		)	(8,513		)
Intangible assets, net	$	26,250		$	24,691

During the three and nine months ended October 31, 2014, the Company incurred and expensed a total of $1.2 million and $3.2 million, respectively, and $541,000 and $1.7 million for the three and nine months ended October 31, 2013, respectively, in software development costs primarily related to the post-implementation and operation stages of its proprietary software.

Amortization expense for the three and nine months ended October 31, 2014 was $1.3 million and $3.4 million, respectively, and $936,000 and $2.6 million for the three and nine months ended October 31, 2013, respectively.

All of the Company’s goodwill was generated from the acquisition of First Horizon MSaver, Inc. on August 11, 2011. There have been no changes to the goodwill carrying value during the three and nine months ended October 31, 2014 and 2013.

- 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.

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