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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets [Abstract]

22. Goodwill and Intangible Assets

Goodwill

The table below sets forth goodwill which is tested annually for impairment on November 30^th:

	Total
Balance at January 1, 2023	$	85,856
Changes		985	⁽¹⁾
Balance at September 30, 2023	$	86,841

_____________________________

⁽¹⁾ On April 11, 2023, the Company acquired 100% of the equity interests of Securrency Transfers, Inc. (renamed WisdomTree Transfers, Inc.) for an aggregate purchase price of $985 (net of cash acquired). The acquisition has been accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, and resulted in all consideration being allocated to goodwill.

Of the total goodwill of $86,841 at September 30, 2023, $85,042 is not deductible for tax purposes as the acquisitions that gave rise to the goodwill were structured as stock acquisitions. The remainder of the goodwill is deductible for U.S. tax purposes.

Intangible Assets

The table below sets forth the Company’s intangible assets which are tested annually for impairment on November 30^th:

	Balance at September 30, 2023
Item	Gross Asset		Accumulated Amortization			Net Asset
ETFS acquisition	$	601,247	$	—		$	601,247
Software development		3,939		(405	)		3,534
Balance at September 30, 2023	$	605,186	$	(405	)	$	604,781

	Balance at December 31, 2022
Item	Gross Asset		Accumulated Amortization			Net Asset
ETFS acquisition	$	601,247	$	—		$	601,247
Software development		2,370		(50	)		2,320
Balance at December 31, 2022	$	603,617	$	(50	)	$	603,567

ETFS Acquisition (Indefinite-Lived)

In connection with the ETFS Acquisition, which was completed on April 11, 2018, the Company identified intangible assets valued at $601,247 related to the right to manage AUM through customary advisory agreements. These intangible assets were determined to have indefinite useful lives and are not deductible for tax purposes.

Software Development (Finite-Lived)

Internally-developed software is amortized over a useful life of three years. During the three and nine months ended September 30, 2023, the Company recognized amortization expense on internally-developed software of $249 and $355, respectively.

As of September 30, 2023, expected amortization expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows:

Remainder of 2023	$	300
2024		1,265
2025		1,262
2026		656
2027		51
2028 and thereafter		—
Total expected amortization expense	$	3,534

The weighted-average remaining useful life of the finite-lived intangible assets is 2.7 years.