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Goodwill And Intangible Assets, Net | 12 Months Ended
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Jun. 30, 2018
Goodwill And Intangible Assets, Net [Abstract] |
Goodwill And Intangible Assets, Net |
10 | . | GOODWILL AND INTANGIBLE ASSETS, net |  |  |  |
|  | Goodwill |  |  |  |
Summarized below is the movement in the carrying value of goodwill for the years ended June 30, 2018, 2017 and 2016:
|  | Gross |  |  | Accumulated |  |  | Carrying |
|  | value |  |  | impairment |  |  | value |
Balance as of July 1, 2015 | $ | 166,437 |  | $ | - |  | $ | 166,437 |
Acquisition of Transact24 (Note 3) |  | 6,024 |  |  | - |  |  | 6,024 |
Acquisition of Masterpayment (Note 3) |  | 17,084 |  |  | - |  |  | 17,084 |
Foreign currency adjustment(1) |  | (10,067 | ) |  | - |  |  | (10,067 | )
Balance as of June 30, 2016 |  | 179,478 |  |  | - |  |  | 179,478 |
Acquisition of Malta FS (Note 3) |  | 2,475 |  |  | - |  |  | 2,475 |
Foreign currency adjustment(1) |  | 6,880 |  |  | - |  |  | 6,880 |
Balance as of June 30, 2017 |  | 188,833 |  |  | - |  |  | 188,833 |
Acquisition of DNI (Note 3) |  | 114,161 |  |  | - |  |  | 114,161 |
Impairment loss |  | - |  |  | (20,917 | ) |  | (20,917 | )
Foreign currency adjustment(1) |  | 1,019 |  |  | 144 |  |  | 1,163 |
Balance as of June 30, 2018 | $ | 304,013 |  | $ | (20,773 | ) | $ | 283,240 |
(1) – the foreign currency adjustment represents the effects of the fluctuations between the South African rand, Euro and the Korean won, and the U.S. dollar on the carrying value. Goodwill associated with the acquisition of DNI, Transact24, Masterpayment and Malta FS represents the excess of cost over the fair value of acquired net assets. The DNI, Transact24, Masterpayment and Malta FS goodwill is not deductible for tax purposes. See Note 3 for the allocation of the purchase price to the fair value of acquired net assets. DNI has been allocated to the Company's Financial inclusion and applied technologies operating segment. Transact24, Masterpayment and Malta FS have all been allocated to the Company's International transaction processing operating segment. Impairment loss The Company assesses the carrying value of goodwill for impairment annually, or more frequently, whenever events occur and circumstances change indicating potential impairment. The Company performs its annual impairment test as at June 30 of each year. During the third quarter of fiscal 2018, the Company recognized an impairment loss of approximately $19.9 million related to goodwill allocated to the Masterpayment business within its international transaction processing operating segment as a result of changes to the operating model of Masterpayment. The Company also impaired goodwill of approximately $1.1 million during its June 2018 annual goodwill impairment assessment related to a business allocated to its South African transaction processing operating segment, which ceased trading during the year. During the second quarter of fiscal 2018, the Company re-evaluated the operating performance and ongoing viability of Masterpayment's working capital financing and supply chain solutions offering and determined to exit this portion of its business. While the Company initially believed that it could scale this offering in the medium to long-term by focusing on customers and industries outside Masterpayment's initial target market, this standalone offering did not fit the Company's strategy of providing payment solutions and working capital to small and medium-sized merchants. In order to focus on the Company's stated international strategy, the Company decided to wind-down the working capital finance book issued to non-payment solutions customers. During the third quarter of fiscal 2018, the Company evaluated Masterpayment's business strategy and following the wind-down referred to above, it has determined that Masterpayment is unlikely to deliver the financial results or cash flows previously anticipated. The Company and two of Masterpayment's senior managers have agreed, by mutual consent, that with effect from the end of March 2018, the managers terminated their employment with Masterpayment in order to dedicate themselves to new professional tasks. In order to determine the amount of goodwill impairment, the estimated fair value of the Company's Masterpayment business was allocated to the individual fair value of the assets and liabilities of Masterpayment as if it had been acquired in a business combination, which resulted in the implied fair value of the goodwill. The Company used a discounted cash flow model in order to determine the fair value of Masterpayment. The allocation of the fair value of Masterpayment required the Company to make a number of assumptions and estimates about the fair value of assets and liabilities where the fair values were not readily available or observable. A further deterioration in the international transaction processing operating segment, or in any other of the Company's businesses, may lead to additional impairments in future periods. Goodwill has been allocated to the Company's reportable segments as follows:
|  | South |  |  |  |  |  | Financial |  |  |  |
|  | African |  |  | International |  |  | inclusion and |  |  |  |
|  | transaction |  |  | transaction |  |  | applied |  |  | Carrying |
|  | processing |  |  | processing |  |  | technologies |  |  | value |
Balance as of July 1, 2015 | $ | 24,579 |  | $ | 115,519 |  | $ | 26,339 |  | $ | 166,437 |
Acquisition of Transact24 (Note 3) |  | - |  |  | 6,024 |  |  | - |  |  | 6,024 |
Acquisition of Masterpayment (Note 3) |  | - |  |  | 17,084 |  |  | - |  |  | 17,084 |
Foreign currency adjustment(1) |  | (4,154 | ) |  | (2,442 | ) |  | (3,471 | ) |  | (10,067 | )
Balance as of June 30, 2016 |  | 20,425 |  |  | 136,185 |  |  | 22,868 |  |  | 179,478 |
Acquisition of Malta FS (Note 3) |  | - |  |  | 2,475 |  |  | - |  |  | 2,475 |
Foreign currency adjustment(1) |  | 2,706 |  |  | 1,910 |  |  | 2,264 |  |  | 6,880 |
Balance as of June 30, 2017 |  | 23,131 |  |  | 140,570 |  |  | 25,132 |  |  | 188,833 |
Acquisition of DNI (Note 3) |  | - |  |  | - |  |  | 114,161 |  |  | 114,161 |
Impairment loss |  | (1,052 | ) |  | (19,865 | ) |  | - |  |  | (20,917 | )
Foreign currency adjustment(1) |  | (1,133 | ) |  | 3,243 |  |  | (947 | ) |  | 1,163 |
Balance as of June 30, 2018 | $ | 20,946 |  | $ | 123,948 |  | $ | 138,346 |  | $ | 283,240 |
(1) – the foreign currency adjustment represents the effects of the fluctuations between the South African rand, Euro and the Korean won, and the U.S. dollar on the carrying value. Intangible assets, net Summarized below is the fair value of intangible assets acquired, translated at the exchange rate applicable as of the relevant acquisition dates, and the weighted-average amortization period:
|  |  | Weighted-
|  | Fair value as | Average
|  | of acquisition | Amortization
|  | date | period (in years)
Finite-lived intangible asset: |  |  |
Acquired during the year ended June 30, 2018 |  |  |
DNI – customer relationships acquired | $ | 97,255 | 5.00– 15.00
DNI – software and unpatented technology |  | 2,609 | 5.00
DNI – trademarks |  | 4,139 | 5.00
Acquired during the year ended June 30, 2017 |  |  |
Pros Software – customer relationships |  | 2,311 | 0.75
Malta FS – customer relationships |  | 186 | 0.65
Malta FS – software and unpatented technology |  | 147 | 1.25
Acquired during the year ended June 30, 2016 |  |  |
Transact24 – customer relationships |  | 3,749 | 5.00
Masterpayment – customer relationships |  | 6,595 | 5.00
Transact24 – software and unpatented technology |  | 1,225 | 3.00
Masterpayment – software and unpatented technology |  | 1,765 | 3.00
Masterpayment – trademarks |  | 1,068 | 5.00
Indefinite-lived intangible asset: |  |  |
Acquired during the year ended June 30, 2017 |  |  |
Malta FS – Financial institution license | $ | 745 | n/a
On acquisition, the Company recognized deferred tax liabilities of approximately $29.1 million and $0.7 million related to the acquisition of intangible assets during the years ended June 30, 2018 and 2017, respectively. The Company assesses the carrying value of intangible assets for impairment whenever events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. No intangible assets have been impaired during the years ended June 30, 2018, 2017, and 2016, respectively. Summarized below is the carrying value and accumulated amortization of intangible assets as of June 30, 2018 and 2017:
|  | As of June 30, 2018 |  | As of June 30, 2017 |  |  |
|  | Gross |  |  |  |  | Net |  | Gross |  |  |  |  | Net
|  | carrying |  | Accumulated |  |  | carrying |  | carrying Accumulated carrying
|  | value |  | amortization |  |  | value |  | value |  | amortization |  |  | value
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships (1) | $ | 197,676 | $ | (76,237 | ) | $ | 121,439 | $ | 99,209 | $ | (65,595 | ) | $ | 33,614
Software and unpatented |  |  |  |  |  |  |  |  |  |  |  |  |  |
technology (1) |  | 35,730 |  | (32,342 | ) |  | 3,388 |  | 33,273 |  | (31,112 | ) |  | 2,161
FTS patent |  | 2,792 |  | (2,792 | ) |  | - |  | 2,935 |  | (2,935 | ) |  | -
Exclusive licenses |  | 4,506 |  | (4,506 | ) |  | - |  | 4,506 |  | (4,506 | ) |  | -
Trademarks(1) |  | 11,101 |  | (5,589 | ) |  | 5,512 |  | 6,972 |  | (4,759 | ) |  | 2,213
Total finite-lived intangible |  |  |  |  |  |  |  |  |  |  |  |  |  |
assets |  | 251,805 |  | (121,466 | ) |  | 130,339 |  | 146,895 |  | (108,907 | ) |  | 37,988
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial institution license |  | 793 |  | - |  |  | 793 |  | 776 |  | - |  |  | 776
Total indefinite-lived |  |  |  |  |  |  |  |  |  |  |  |  |  |
intangible assets |  | 793 |  | - |  |  | 793 |  | 776 |  | - |  |  | 776
Total intangible assets | $ | 252,598 | $ | (121,466 | ) | $ | 131,132 | $ | 147,671 | $ | (108,907 | ) | $ | 38,764
(1) Includes the intangible assets acquired as part of the DNI acquisition in June 2018, Pros Software acquisition in October 2016 and Malta FS acquisition in November 2016. Amortization expense charged for the years to June 30, 2018, 2017 and 2016 was $11.8 million, $14.0 million, and $11.2 million, respectively. Future estimated annual amortization expense for the next five fiscal years, assuming exchange rates prevailing on June 30, 2018, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as a result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors.
2019 | $ | 22,126
2020 |  | 21,123
2021 |  | 15,283
2022 |  | 10,928
2023 |  | 10,928
Thereafter |  | 49,951
Total future estimated amortization expense | $ | 130,339

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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