Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

24. Goodwill and Intangible Assets

Goodwill

The table below sets forth goodwill by reporting unit. Goodwill allocated to the U.S. Business reporting unit is tested annually for impairment on April 30

. Goodwill allocated to the European Business reporting unit is tested annually for impairment on November 30

	Reporting Unit
	European Business (1)		U.S. Business		Total
Balance at January 1, 2018	$	—	$	1,799	$	1,799
Increases		84,057		—		84,057
Balance at December 31, 2018	$	84,057	$	1,799	$	85,856

(1)	The European Business is included in the Company’s International Business reportable segment.

Goodwill allocated to the U.S. Business reporting unit and European Business reporting unit was tested for impairment on April 30, 2018 and November 30, 2018, respectively. The fair value of the reporting units exceeded their carrying value and therefore no impairment was recognized.

The goodwill allocated to the European Business reporting unit is not deductible for tax purposes as the transaction was structured as a stock acquisition occurring in the United Kingdom. The goodwill allocated to the U.S. Business reporting unit is deductible for tax purposes.

Intangible Assets (Indefinite-Lived)

	Advisory Agreements (ETFS)		Advisory Agreements (Questrade AUM)			Advisory Agreement (GCC)			Total
Balance at January 1, 2018	$	—	$	2,132		$	9,953		$	12,085
Increases		601,247		—			—			601,247
Impairment		—		—			(9,953	)		(9,953	)
Foreign currency translation		—		(170	)		—			(170	)
Balance at December 31, 2018	$	601,247	$	1,962		$	—		$	603,209

ETFS

In connection with the ETFS Acquisition which was completed on April 11, 2018 (see Note 3), the Company identified intangible assets valued at $601,247 related to the right to manage AUM through customary advisory agreements. The fair value of the intangible assets was determined using an income approach (discounted cash flow analysis) which relied upon significant unobservable inputs including a revenue growth multiple of 3% to 4% and a weighted average cost of capital of 11.6%. The intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes. The Company has designated November 30

as its annual impairment testing date for these intangible assets.

During the fourth quarter of 2018, the Company performed its indefinite-lived intangible asset impairment test related to its ETFS customary advisory agreements. The results of this analysis identified no indicators of impairment to be recognized based upon a qualitative assessment.

Questrade ETFs

During the fourth quarter of 2017, the Company acquired eight Canadian-listed ETFs from Questrade, Inc. (the “Questrade ETFs”) with approximately CAD $99,108 (USD $77,403) in AUM at closing. The purchase price was CAD $2,675 (USD $2,132), all of which was allocated to the Company’s right to manage AUM in the form of advisory contracts. This intangible asset is translated based on the end of period exchange rates from local currency to U.S. dollars.

Most of the Questrade ETFs were merged into the Company’s existing Canadian-listed ETFs. The intangible assets (which are deductible for tax purposes) were determined to have an indefinite useful life. The Company has designated November 30

as its annual impairment testing date for these intangible assets.

During the fourth quarter of 2018, the Company performed its indefinite-lived intangible asset impairment test related to its Questrade customary advisory agreements. The results of this analysis identified no indicators of impairment to be recognized based upon a qualitative assessment.

GCC

Effective January 1, 2016, the Company acquired the outstanding membership interest in GreenHaven Commodity Services, LLC, the managing owner of the GreenHaven Continuous Commodity Index Fund (renamed the WisdomTree Continuous Commodity Index Fund, or “GCC”). As part of the acquisition, the Company identified an intangible asset valued at $9,953 related to its customary advisory agreement with GCC. This intangible asset (which is deductible for tax purposes) was determined to have an indefinite useful life. The Company has designated November 30

as its annual impairment testing date for this indefinite-lived intangible asset.

During the fourth quarter of 2018, the Company performed its indefinite-lived intangible asset impairment test related to its GCC customary advisory agreements using a quantitative approach. The fair value of the intangible asset was derived from a discounted cash flow analysis which assumed projected growth rates of

% to

%. Consideration was also given to the historical performance of GCC against prior expectations. The analysis resulted in the recognition of an impairment of $

9,953