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Note 8 - Intangible Assets

3 Months Ended

Mar. 31, 2023

Intangible Assets Disclosure [Text Block]

NOTE 8 INTANGIBLE ASSETS

Intangible assets at March 31, 2023 and December 31, 2022 are comprised as follows:

(in thousands)	March 31, 2023
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Intangible assets subject to amortization:
Database	$	4,918	$	4,918	$	—
Vehicle service agreements in-force		3,680		3,680		—
Customer relationships		32,442		15,048		17,394
Intangible assets not subject to amortization:
Trade names		14,287		—		14,287
Total	$	55,327	$	23,646	$	31,681

(in thousands)	December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Intangible assets subject to amortization:
Database	$	4,918	$	4,918	$	—
Vehicle service agreements in-force		3,680		3,680		—
Customer relationships		32,442		13,630		18,812
Intangible assets not subject to amortization:
Trade names		14,287		—		14,287
Total	$	55,327	$	22,228	$	33,099

KINGSWAY FINANCIAL SERVICES INC.

Notes to Consolidated Financial Statements (Unaudited)

March 31, 2023

The Company's intangible assets with definite useful lives are amortized either based on the patterns in which the economic benefits of the intangible assets are expected to be consumed or using the straight-line method over their estimated useful lives, which range from 7 to 15 years. Amortization of intangible assets was $1.4 million and $1.4 million for the three months ended March 31, 2023 and March 31, 2022, respectively.

The trade names intangible assets have indefinite useful lives and are not amortized. No impairment charges were recorded during the three months ended March 31, 2023 and March 31, 2022.

Indefinite-lived intangible assets consist of trade names, which are assessed for impairment annually as of November 30, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. The Company may perform its impairment test for any indefinite-lived intangible asset through a qualitative assessment or elect to proceed directly to a quantitative impairment test, however, the Company may resume a qualitative assessment in any subsequent period if facts and circumstances permit.

As of November 30, 2022, the Company conducted its annual qualitative assessment. As a result, the Company determined that certain trade names should be further examined under a quantitative approach. Based on the results of the quantitative approach, the estimated fair values of the trade names exceeded their respective carrying values; therefore, the Company did not record any impairment. However, the Company notes that certain of its indefinite-lived intangible assets are sensitive to changes in interest rates and a continued increase in rates could cause certain assets to become impaired.