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GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Mar. 31, 2013
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | 3. GOODWILL AND OTHER INTANGIBLE ASSETS As of March 31, 2013, we reclassified other intangible assets from other assets to goodwill and other intangible assets and conformed the presentation for the year ended March 31, 2012. Our goodwill and other intangible assets consist of the following (in thousands):
|  | March 31, 2013 |  |  | March 31, 2012 |
Goodwill |  | $ | 28,660 |  |  | $ | 28,444 |
Customer relationships |  |  | 2,897 |  |  |  | 3,902 |
Capitalized software development |  |  | 1,407 |  |  |  | 1,173 |
|  | $ | 32,964 |  |  | $ | 33,519 |
GOODWILL Goodwill represents the premium paid over the fair value of the net tangible and intangible assets we have acquired in business combinations. The following table summarizes the amount of goodwill allocated to our reporting units (in thousands):
|  | Financing Segment |  |  | Technology Segment |  |  |  |
Reporting Units: |  | Financing |  |  | Technology |  |  | Software Procurement |  |  | Software Document Management |  |  | Total |
Balance April 1, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 4,029 |  |  | $ | 27,355 |  |  | $ | 4,644 |  |  | $ | 1,089 |  |  | $ | 37,117 |
Accumulated impairment losses |  |  | (4,029 | ) |  |  | - |  |  |  | (4,644 | ) |  |  | - |  |  |  | (8,673 | )
|  |  | - |  |  |  | 27,355 |  |  |  | - |  |  |  | 1,089 |  |  |  | 28,444 |
Purchase accounting adjustments |  |  | - |  |  |  | 216 |  |  |  | - |  |  |  | - |  |  |  | 216 |
Balance March 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 4,029 |  |  |  | 27,571 |  |  |  | 4,644 |  |  |  | 1,089 |  |  |  | 37,333 |
Accumulated impairment losses |  |  | (4,029 | ) |  |  | - |  |  |  | (4,644 | ) |  |  | - |  |  |  | (8,673 | )
Goodwill - net balance March 31, 2013 |  | $ | - |  |  | $ | 27,571 |  |  | $ | - |  |  | $ | 1,089 |  |  | $ | 28,660 |
During the third quarter of fiscal 2013, we performed our annual impairment test of goodwill and concluded that the fair value of our Technology and Software Document Management reporting units were in excess of their respective book values. As part of our annual assessment, we elected to bypass the qualitative assessment and estimated the fair values of our reporting units using the best information available, including prices for similar assets and liabilities and other valuation techniques. We employed both the market approach and the income approach to determine fair value. The market approach measures the value of an entity through an analysis of recent sales or by comparison to comparable companies. The income approach measures the value of an entity by discounting expected future cash flows. Under the market approach, we used the guideline public company method and similar transactions method. Under the guideline public company method, we analyzed companies that were in the same industry, performed the same or similar services, had similar operations, and are considered competitors. Multiples that related to some level of earnings or revenue were considered most appropriate for the industry in which we operate. The multiples selected were based on our analysis of the guideline companies' profitability ratios and return to investors. We compared our reporting units' size and ranking against the guideline companies, taking into consideration risk, profitability and growth along with guideline medians and averages. We then selected pricing multiples, adjusted appropriately for size and risk, to apply to our reporting units' financial data. Multiples were weighted based on the consistency and comparability of the guideline companies along with the respective reporting units, including margins, profitability and leverage. For each of the reporting units, we used the following multiples: enterprise value ("EV") to trailing twelve months ("TTM") revenue, EV to TTM earnings before interest and taxes ("EBIT"), and EV to forward twelve months revenue. Under the similar transactions method, we examined the recently completed transactions of sales of stock of private or public companies, which are in the same industry or similar lines of business to compute the enterprise value to trailing twelve months revenue multiple. This multiple, adjusted for differences in size, was used to estimate the fair value. Under the income approach, we used the discounted future cash flow method to estimate the fair value of each of the reporting units by discounting the expected future cash flows to their present value using the weighted average cost of capital, which reflects the overall level of inherent risk involved in our reporting units and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of our model, we used a terminal value approach. Under this approach, we used the estimated earnings before interest, taxes, depreciation and amortization in the final year of our model, adjusted to estimate a normalized cash flow, applied a perpetuity growth assumption and discounted by a perpetuity discount factor to determine the terminal value. We incorporated the present value of the resulting terminal value into our estimate of fair value. The estimated fair value of our reporting units is dependent on several significant assumptions underlying our forecasted cash flows and weighted average cost of capital. The forecasted cash flows were based on management's best estimates after considering economic and market conditions over the projection period, including business plans, growth rates in sales, costs, estimates of future expected changes in operating margins and cash expenditures. Any adverse change including a significant decline in our expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; or slower growth rates may impact our ability to meet our forecasted cash flow estimates. The fair value of our Technology and Software Document Management reporting units exceeded their respective carrying values as of October 1, 2012, and our conclusions regarding the recoverability of goodwill would not have been impacted by a 10% change in the fair values. OTHER INTANGIBLE ASSETS As of March 31, 2013 and 2012, our other intangible assets were $4.3 million and $5.1 million, respectively, which consist of customer relationships and capitalized software development costs. The gross carrying amount and accumulated amortization of customer relationships were $6.5 million and $3.6 million, respectively, as of March 31, 2013, and $6.5 million and $2.6 million, respectively, as of March 31, 2012. The gross carrying amount and accumulated amortization of capitalized software development costs were $1.8 million and $0.4 million, respectively, as of March 31, 2013 and $1.4 million and $0.2 million, respectively, as of March 31, 2012. Customer relationships and capitalized software development costs are amortized over their estimated useful live, which is generally between 3 to 5 years. Total amortization expense was $1.3 million, $0.5 million, and $138 thousand for the years ended March 31, 2013, 2012 and 2011, respectively. Amortization expense is estimated to be $1.3 million, $1.1 million, $1.1 million, $0.7 million, and $0.1 million for the years ended March 31, 2014, 2015, 2016, 2017 and 2018, respectively.

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