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Note 6. Goodwill and Other Intangible Assets (Notes) | 12 Months Ended
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Jun. 30, 2020
Goodwill and Other Intangible Assets [Abstract] |
Goodwill and Intangible Assets Disclosure | Goodwill and Other Intangible Assets A summary of goodwill is as follows:
(Amounts in Thousands) |
Balance as of June 30, 2018 |
Goodwill | $ | 19,017 |
Accumulated impairment | (12,826 | )
Goodwill, net | 6,191 |
Goodwill Acquired | 11,913 |
Balance as of June 30, 2019 |
Goodwill | 30,930 |
Accumulated impairment | (12,826 | )
Goodwill, net | 18,104 |
Purchase Accounting Adjustments | 1,832 |
Impairment | (7,925 | )
Balance as of June 30, 2020 |
Goodwill | 32,762 |
Accumulated impairment | (20,751 | )
Goodwill, net | $ | 12,011 |
We acquired $13.7 million in goodwill resulting from the GES acquisition, with $11.9 million reported in fiscal year 2019 and $1.8 million added in fiscal year 2020 as a result of fair value measurement period adjustments. See Note 2 - Acquisitions of Notes to Consolidated Financial Statements for more information on this acquisition. During fiscal year 2020, $7.9 million of goodwill impairment was recognized at the GES reporting unit. During fiscal years 2019 and 2018, no goodwill impairment was recognized. GES’s annual goodwill impairment test date is April 30th. Subsequent to our annual test date, we identified an indicator of impairment related to future anticipated revenues, which triggered an additional impairment test as of June 30, 2020. The June 30, 2020 test (the “GES impairment test”) resulted in a $7.9 million goodwill impairment charge, partially offset by a $1.0 million reduction in income tax expense associated with the deferred tax asset established for the deductible portion of the impaired goodwill. For the GES impairment test, we used an independent, third-party valuation specialist to assist in the determination of fair value for the GES reporting unit. We used a combination of the Income Approach, using a discounted cash flow model, and the Market Approach, based on projected fiscal year 2021 results. Significant assumptions include:
• | Income Approach and Market Approach each weighted at 50%
• | Weighted average cost of capital (“WACC”) of 20%, based on observed market return data and size and company-specific risk premiums; a change of 100 basis points in the determined WACC has an approximate $1.7 million impact on the calculated fair value
• | Forecasted revenue growth rates ranging from 20% to 50% in fiscal years 2021 through 2023, and ranging from 3% to 12% thereafter
• | Terminal growth rate of 3%
• | Improved operating margins driven by revenue growth and product mix
The forecast assumptions are considered management’s best projections for the outlook of this business but are uncertain, and potential events or circumstances, such as not receiving the award of certain identified new business programs in fiscal year 2021 and beyond, not realizing revenue growth projections from new and existing customers and markets, and not achieving forecasted operating margins, could have a negative effect on GES’s estimated fair value and result in additional impairment charges that could be material to the Consolidated Financial Statements. Other macroeconomic events or circumstances, such as a sustained downturn in global economies or the industries GES serves, also could negatively affect estimated fair values. A summary of other intangible assets subject to amortization is as follows:
| June 30, 2020 |  | June 30, 2019
(Amounts in Thousands) | Cost |  | Accumulated Amortization |  | Net Value |  | Cost |  | Accumulated Amortization |  | Net Value
Capitalized Software | $ | 32,052 |  |  | $ | 27,851 |  |  | $ | 4,201 |  |  | $ | 32,015 |  |  | $ | 27,124 |  |  | $ | 4,891 |
Customer Relationships | 8,618 |  |  | 2,014 |  |  | 6,604 |  |  | 8,618 |  |  | 1,506 |  |  | 7,112 |
Technology | 5,060 |  |  | 1,777 |  |  | 3,283 |  |  | 5,060 |  |  | 766 |  |  | 4,294 |
Trade Name | 6,369 |  |  | 1,114 |  |  | 5,255 |  |  | 6,369 |  |  | 478 |  |  | 5,891 |
Other Intangible Assets | $ | 52,099 |  |  | $ | 32,756 |  |  | $ | 19,343 |  |  | $ | 52,062 |  |  | $ | 29,874 |  |  | $ | 22,188 |
During fiscal years 2020, 2019, and 2018, amortization expense of other intangible assets was, in millions, $3.2, $2.6, and $0.9, respectively. Amortization expense in future periods is expected to be, in millions, $3.1, $3.0, $2.9, $2.1, and $1.6 in the five years ending June 30, 2025, and $6.6 thereafter. The estimated useful life of internal-use software ranges from 3 to 10 years. The amortization period for the customer relationships, technology, and trade name intangible assets is 15 years, 5 years, and 10 years, respectively. We have no intangible assets with indefinite useful lives which are not subject to amortization. Substantially all the customer relationships, technology, and trade name intangible assets were acquired in fiscal year 2019 as a result of the GES acquisition. See Note 2 - Acquisitions of Notes to Consolidated Financial Statements for more information on this acquisition. No customer relationships, technology, and trade name intangible assets were acquired in fiscal year 2020. Intangible assets are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. During the fourth quarter of fiscal year 2020, as a result of the indicator of impairment that led to goodwill impairment, we determined that the carrying amount of the GES long-lived asset group, including their other intangible assets, may not be recoverable. As a result, we tested the GES long-lived asset group for recoverability as of June 30, 2020. The test resulted in no impairment as the undiscounted cash flows of the GES long-lived asset group exceeded the carrying amount. Significant judgment was used in performing the impairment test, including the use of customer relationships as the primary asset to determine the remaining useful life of the asset group, and the assumptions around the undiscounted cash flows of the asset group. If the estimated undiscounted cash flows related to GES’s long-lived assets are not realized, an impairment charge may result, which could be material to the Consolidated Financial Statements.

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