Intangible Assets and Goodwill

Intangible Assets

Intangible assets are comprised of the following significant classes (in thousands):



	November 30, 2018							November 30, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
Purchased technology	$	154,301	$	(110,959	)	$	43,342	$	154,301	$	(88,224	)	$	66,077
Customer-related	67,802		(56,589		)	11,213		67,802		(46,230		)	21,572
Trademarks and trade names	17,740		(13,376		)	4,364		17,740		(10,495		)	7,245
Total	$	239,843	$	(180,924	)	$	58,919	$	239,843	$	(144,949	)	$	94,894

We amortize intangible assets assuming no expected residual value. Amortization expense related to these intangible assets was $36.0 million, $33.1 million and $28.2 million in fiscal years 2018, 2017 and 2016, respectively.

During the third quarter of fiscal year 2016, we evaluated the ongoing value of the intangible assets associated with the technology obtained in connection with the acquisition of Modulus. As a result of our decision to abandon the related assets due to a change in our expected ability to use the technology internally, we determined that the intangible assets were fully impaired. As a result, we incurred an impairment charge of $5.1 million in the third quarter of fiscal year 2016.

Future amortization expense for intangible assets as of November 30, 2018 is as follows (in thousands):



2019	$	34,932
2020	10,152
2021	10,033
2022	3,802
Total	$	58,919

Goodwill

Changes in the carrying amount of goodwill for fiscal years 2018 and 2017 are as follows (in thousands):



	November 30, 2018			November 30, 2017
Balance, beginning of year	$	315,041		$	278,067
Additions	—			36,934
Translation adjustments	(49		)	40
Balance, end of year	$	314,992		$	315,041

The additions to goodwill during fiscal year 2017 are related to the acquisitions of DataRPM in March 2017 and Kinvey in June 2017 (Note 7).

Changes in the carrying amount of goodwill by reportable segment for fiscal year 2018 are as follows (in thousands):



	November 30, 2017		Translation adjustments			November 30, 2018
OpenEdge	$	249,036	$	(49	)	$	248,987
Data Connectivity and Integration	19,040		—			19,040
Application Development and Deployment	46,965		—			46,965
Total goodwill	$	315,041	$	(49	)	$	314,992

Impairment of Goodwill

We assess the impairment of goodwill on an annual basis and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

During fiscal year 2018, we tested goodwill for impairment for each of our reporting units as of October 31, 2018. Our reporting units each had fair values which significantly exceeded their carrying values as of the annual impairment date. We did not recognize any goodwill impairment charges during fiscal years 2018 or 2017.

During fiscal year 2016, we recognized a $92 million goodwill impairment loss related to our Application Development and Deployment reporting unit. To determine the fair value of our Application Development and Deployment reporting unit as part of the two-step test for goodwill impairment as of October 31, 2016, we concluded that a combination of the income approach and the market approach was most appropriate. The fair value of this reporting unit was negatively impacted by reduced future growth expectations resulting from a comprehensive review of our strategy and operations by our Chief Executive Officer, our Board of Directors, and the executive management team. Based on this analysis, the implied fair value of goodwill was substantially lower than the carrying value of goodwill for the reporting unit, resulting in the $92 million goodwill impairment loss. This impairment loss was recorded to impairment of goodwill within operating expenses in our fiscal year 2016 consolidated statement of operations.

The evaluation of goodwill for impairment requires significant judgment. While we believe that the assumptions used in our impairment test are reasonable, the analysis is sensitive to adverse changes used in the assumptions of the valuations. In particular, changes in the projected cash flows, the discount rate, the terminal year growth rate and market multiple assumptions could produce significantly different results for the impairment analyses. In the event of future changes in business conditions, we will be required to reassess and update our forecasts and estimates used in future impairment analyses. If the results of these analyses are lower than current estimates, a material impairment charge may result at that time.