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Goodwill And Intangible Assets, Net | 12 Months Ended
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Jun. 30, 2023
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, 2023, 2022 and 2021: Gross value Accumulated impairment Carrying value Balance as of July 1, 2020 $ 63,194 $ (39,025) $ 24,169 Liquidation of subsidiaries (2) (26,629) 26,629 - Foreign currency adjustment (1) 6,384 (1,400) 4,984 Balance as of June 30, 2021 42,949 (13,796) 29,153 Acquisition of Connect (Note 3) (3) 153,693 - 153,693 Foreign currency adjustment (1) (21,166) 977 (20,189) Balance as of June 30, 2022 175,476 (12,819) 162,657 Impairment loss - (7,039) (7,039) Foreign currency adjustment (1) (22,857) 982 (21,875) Balance as of June 30, 2023 $ 152,619 $ (18,876) $ 133,743 (1) – The foreign currency adjustment represents the effects of the fluctuations between the South African Rand and the Euro, against the U.S. dollar on the carrying value. (2) – The Company deconsolidated the goodwill and accumulated impairment related to entities it substantially liquidated during the year ended June 30, 2021. (3) – Represents goodwill arising from the acquisition of Connect and translated at the foreign exchange rate applicable on the date the transaction became effective. This goodwill has been allocated to the merchant reportable operating segment . Goodwill associated with the acquisition of Connect represents the excess of cost over the fair value of acquired net assets. Connect 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. 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. Except as discussed below, no goodwill has been impaired during the years ended June 30, 2023, 2022 and 2021, respectively. Year ended June 30, 2023 goodwill impairment loss The Company recognized an impairment loss of $ 7.0 million as a result of its annual impairment analysis related to goodwill allocated to its hardware/ software support business within its merchant operating segment. The impairment loss resulted from a reassessment of the business’ growth prospects given the change in customer demand as a result of the introduction of cheaper hardware devices which incorporate software widely adopted by our customers customer-base, coupled with a challenging economic environment in South Africa. The impairment is included within the caption impairment loss in the consolidated statement of operations for the year ended June 30, 2023. In order to determine the amount of the goodwill impairment, the estimated fair value of our hardware/ software support business assets and liabilities were compared to the carrying value of its assets and liabilities. The Company used a discounted cash flow model in order to determine the fair value of the business. Based on this analysis, the Company determined that the carrying value of the business’ assets and liabilities exceeded their fair value at the reporting date. In the event that there is a deterioration in the Company’s operating segments, or in any other of the Company’s businesses, this may lead to additional impairments in future periods. Furthermore, the difficulties of integrating acquired businesses may be increased by the necessity of integrating personnel with disparate business backgrounds and combining different corporate cultures. The Company also may not be able to retain key employees or customers of an acquired business or realize cost efficiencies or synergies or other benefits that it anticipated when selecting its acquisition candidates. Acquisition candidates may have liabilities or adverse operating issues that the Company fails to discover through due diligence prior to the acquisition. These factors may also lead to additional impairments in future periods. 10. GOODWILL AND INTANGIBLE ASSETS, net (continued) Goodwill (continued) Goodwill has been allocated to the Company’s reportable segments as follows: Consumer Merchant Carrying value Balance as of July 1, 2020 $ - $ 24,169 $ 24,169 Liquidation of subsidiaries - - - Foreign currency adjustment (1) - 4,984 4,984 Balance as of June 30, 2021 - 29,153 29,153 Acquisition of Connect (Note 3) - 153,693 153,693 Foreign currency adjustment (1) - (20,189) (20,189) Balance as of June 30, 2022 - 162,657 162,657 Impairment loss - (7,039) (7,039) Foreign currency adjustment (1) - (21,875) (21,875) Balance as of June 30, 2023 $ - $ 133,743 $ 133,743 (1) – The foreign currency adjustment represents the effects of the fluctuations between the South African rand and the Euro, against the U.S. dollar on the carrying value. Intangible assets Intangible assets acquired 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: Fair value as of acquisition date Weighted-average amortization period (in years) Finite-lived intangible asset: Acquired during the year ended June 30, 2022: Connect – integrated platform $ 142,981 10 Connect – customer relationships 20,516 8 Connect –brands $ 15,987 10 Impairment loss 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, 2023, 2022 and 2021, respectively. Summarized below is the carrying value and accumulated amortization of the intangible assets as of June 30, 2023, and June 30, 2022: As of June 30, 2023 As of June 30, 2022 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Finite-lived intangible assets: Customer relationships (1) $ 24,978 $ (11,565) $ 13,413 $ 26,937 $ (9,140) $ 17,797 Software, integrated platform and unpatented technology (1) 110,906 (13,711) 97,195 127,785 (3,075) 124,710 FTS patent 2,034 (2,034) - 2,352 (2,352) - Brands and trademarks (1) 13,852 (2,863) 10,989 16,018 (1,823) 14,195 Total finite-lived intangible assets $ 151,770 $ (30,173) $ 121,597 $ 173,092 $ (16,390) $ 156,702 (1) 2022 balances include the intangible assets acquired as part of the Connect acquisition in April 2022. 10. GOODWILL AND INTANGIBLE ASSETS, net (continued) Intangible assets (continued) Carrying value and amortization of intangible assets (continued) Aggregate amortization expense on the finite-lived intangible assets for the years ended June 30, 2023, 2022 and 2021, was approximately $ 15.0 million, $ 3.8 million and $ 0.4 , respectively. Future estimated annual amortization expense for the next five fiscal years and thereafter, using the exchange rates that prevailed on June 30, 2023, 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. Fiscal 2023 $ 14,362 Fiscal 2024 14,364 Fiscal 2025 14,364 Fiscal 2026 14,310 Fiscal 2027 14,278 Thereafter 49,919 Total future estimated annual amortization expense $ 121,597

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