Intangible and Other Non-Current Assets

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

INTANGIBLE AND OTHER NON-CURRENT ASSETS

Intangible and other non-current assets are as follows (in thousands):


	December 31, 2022		September 30, 2023
Tradenames	$	25,610	$	28,863
Capitalized commissions on preneed contracts, net of accumulated amortization of $2,990 and $3,579, respectively	4,048		4,507
Prepaid agreements not-to-compete, net of accumulated amortization of $3,515 and $3,707, respectively	1,877		1,464
Internal-use software, net of accumulated amortization of $200 and $372, respectively	1,271		1,968
Other	124		419
Intangible and other non-current assets, net	$	32,930	$	37,221

Tradenames

During the nine months ended September 30, 2023, we increased the value of our tradenames by $3.5 million, with $1.3 million allocated to our funeral home segment and $2.2 million allocated to our cemetery segment, related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

As a result of our 2023 qualitative assessment, we determined that there were factors that would indicate the need to perform an additional quantitative impairment test for certain funeral home businesses. As a result of this additional quantitative impairment test, we recorded an impairment to the tradenames for two of our funeral homes of $0.2 million, during the three and nine months ended September 30, 2023, as the carrying amount of these tradenames exceeded the fair value. For our 2022

assessment, there was no impairment to intangibles assets. See Note 1 to the Consolidated Financial Statements included herein for a discussion of the methodology used for our indefinite-lived intangible asset impairment test.

Capitalized Commissions

We capitalize sales commissions and other direct selling costs related to preneed cemetery merchandise and services and preneed funeral trust contracts as these costs are incremental and recoverable costs of obtaining a contract with a customer. Our capitalized commissions on preneed contracts are amortized on a straight-line basis over the average maturity period of ten years for our preneed funeral trust contracts and eight years for our preneed cemetery merchandise and services contracts.

Amortization expense was $181,000 and $204,000 for the three months ended September 30, 2022 and 2023, respectively and $525,000 and $589,000 for the nine months ended September 30, 2022 and 2023, respectively.

Prepaid Agreements

Prepaid agreements not-to-compete are amortized over the term of the respective agreements, generally ranging from one to ten years. Amortization expense was $142,000 and $131,000 for the three months ended September 30, 2022 and 2023, respectively and $432,000 and $393,000 for the nine months ended September 30, 2022 and 2023, respectively.

Internal-use Software

Internal-use software is amortized on a straight-line basis typically over three to five years. Amortization expense was $56,000 and $72,000 for the three months ended September 30, 2022 and 2023, respectively and $167,000 and $206,000 for the nine months ended September 30, 2022 and 2023, respectively.

The aggregate amortization expense for our capitalized commissions, prepaid agreements and internal-use software as of September 30, 2023 is as follows (in thousands):


	Capitalized Commissions		Prepaid Agreements		Internal-use Software
Years ending December 31,
Remainder of 2023	$	209	$	129	$	79
2024	800		424		305
2025	735		377		409
2026	668		262		396
2027	603		142		394
Thereafter	1,492		130		385
Total amortization expense	$	4,507	$	1,464	$	1,968