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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets [Abstract]

24. Goodwill and Intangible Assets

Goodwill

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

	Total
Balance at January 1, 2023	$	85,856
Changes		985(1)
Balance at December 31, 2023	$	86,841

(1) On April 11, 2023, the Company acquired 100% of the capital stock 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.

Goodwill was tested for impairment on November 30, 2023. The quantitative impairment test was performed using a market approach, whereby the market capitalization of the Company (a single reporting unit) was compared to its carrying value. The market capitalization was derived from the Company’s publicly traded stock price plus a reasonable control premium. The fair value of the reporting unit exceeded its carrying value and therefore no impairment was recognized.

Of the total goodwill of $86,841 at December 31, 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 30th:

	Balance at December 31, 2023
Item	Gross Asset		Accumulated Amortization		Net Asset
ETFS acquisition	$	601,247	$	—	$	601,247
Software development		4,519		(684)		3,835
Balance at December 31, 2023	$	605,766	$	(684)	$	605,082

	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.

The Company performed its indefinite-lived intangible asset impairment test related to these customary advisory agreements on November 30, 2023. The results of this analysis identified no indicators of impairment to be recognized based upon a quantitative assessment (discounted cash flow analysis) which relied upon significant unobservable inputs including a projected revenue growth rate of 3% and a weighted average cost of capital of 10.5%.

Software Development (Finite-Lived)

Internally-developed software is amortized over a useful life of three years. During the years ended December 31, 2023 and 2022, the Company recognized amortization expense on internally-developed software of $634 and $50, respectively.

As of December 31, 2023, expected amortization expense for the unamortized finite-lived intangible assets for the next five years and thereafter is as follows:

2024	$	1,375
2025		1,440
2026		873
2027		130
2028		17
2029 and thereafter		—
Total expected amortization expense	$	3,835

The weighted-average remaining useful life of the finite-lived intangible assets is 2.6 years.