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Goodwill and Intangible Assets

12 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

12. Goodwill and Intangible Assets

The table below summarizes goodwill balances by reporting unit (in thousands):


	June 30,
Reporting Unit	2021		2020
Chamberlain	$	4,716	$	4,716
AUC		68,321		68,321
RUSM and RUSVM		237,173		237,173
Financial Services		376,164		376,004
Total	$	686,374	$	686,214

The table below summarizes goodwill balances by reportable segment (in thousands):


	June 30,
Reportable Segment	2021		2020
Medical and Healthcare	$	310,210	$	310,210
Financial Services		376,164		376,004
Total	$	686,374	$	686,214

The table below summarizes the changes in goodwill balances by reportable segment (in thousands):


	Medical and		Financial
	Healthcare		Services		Total
June 30, 2019	$	310,210	$	377,046	$	687,256
Purchase accounting adjustments		—		(92)		(92)
Foreign exchange rate changes		—		(950)		(950)
June 30, 2020		310,210		376,004		686,214
Foreign exchange rate changes		—		160		160
June 30, 2021	$	310,210	$	376,164	$	686,374

The foreign exchange rate changes in the Financial Services segment goodwill balance from June 30, 2020 is the result of a change in the foreign currency exchange rates on the EduPristine goodwill balance recorded in the Indian Rupee compared to the U.S. dollar.

Intangible assets consisted of the following (in thousands):


	June 30, 2021
	Gross Carrying		Accumulated		Weighted-Average
	Amount		Amortization		Amortization Period
Amortizable intangible assets:
Customer relationships	$	68,900	$	(27,844)	10 Years
Curriculum/software		11,600		(4,028)	6 Years
Course delivery technology		6,700		(2,791)	5 Years
Total	$	87,200	$	(34,663)
Indefinite-lived intangible assets:
Trade names	$	94,472
Chamberlain Title IV eligibility and accreditations		1,200
AUC Title IV eligibility and accreditations		100,000
Ross Title IV eligibility and accreditations		14,100
Intellectual property		13,940
Total	$	223,712


	June 30, 2020
	Gross Carrying		Accumulated
	Amount		Amortization
Amortizable intangible assets:
Customer relationships	$	68,900	$	(21,044)
Curriculum/software		11,600		(2,094)
Course delivery technology		7,200		(1,952)
Total	$	87,700	$	(25,090)
Indefinite-lived intangible assets:
Trade names	$	95,664
Chamberlain Title IV eligibility and accreditations		1,200
AUC Title IV eligibility and accreditations		100,000
Ross Title IV eligibility and accreditations		14,100
Intellectual property		13,940
Total	$	224,904

The table below summarizes the indefinite-lived intangible asset balances by reportable segment (in thousands):


	June 30,
Reportable Segment	2021		2020
Medical and Healthcare	$	137,500	$	137,500
Financial Services		86,212		87,404
Total	$	223,712	$	224,904

During the fourth quarter of fiscal year 2021, EduPristine’s trade name intangible asset was considered to be impaired and written down by $1.2 million. This was recorded within restructuring expense on the Consolidated Statement of Income for the year ended June 30, 2021.

Amortization expense for amortized intangible assets was $10.1 million, $10.3 million, and $6.9 million for the years ended June 30, 2021, 2020, and 2019, respectively. Estimated intangible asset amortization expense is as follows (in thousands):


	Financial
Fiscal Year	Services
2022	$	9,943
2023		9,792
2024		9,509
2025		7,933
2026		5,960
Thereafter		9,400
Total	$	52,537

All amortizable intangible assets except ACAMS customer relationships are amortized on a straight-line basis. The amount amortized for ACAMS customer relationships is based on the estimated retention of the customers, giving consideration to the revenue and cash flow associated with these existing customers.

Indefinite-lived intangible assets related to trade names, Title IV eligibility and accreditations, and intellectual property are not amortized, as there are no legal, regulatory, contractual, economic, or other factors that limit the useful life of these intangible assets to the reporting entity.

Goodwill and indefinite-lived intangibles are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31.

Adtalem has four reporting units that contained goodwill as of May 31, 2021. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management and the Board. If the carrying amount of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent the fair value of the reporting unit goodwill is less than the carrying amount of the goodwill, up to the amount of goodwill recorded. In analyzing the results of operations and business conditions of all four reporting units, it was determined that a quantitative impairment analysis was not necessary for any reporting unit to determine if the carrying values of the reporting unit exceeded their fair values as of the May 31, 2021 annual impairment review date because it was determined to be more likely than not that fair value exceeded carrying value.

Adtalem has four reporting units that contained indefinite-lived intangible assets as of May 31, 2021. For indefinite-lived intangible assets, management first analyzes qualitative factors, including results of operations and business conditions of the four reporting units that contained indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. In qualitatively assessing the indefinite-lived intangible assets of the four reporting units, it was determined that it was more likely than not that these assets’ fair values exceeded their carrying values as of the May 31, 2021 annual impairment review date.