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Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following (in thousands):

	September 30,
	2019		2018
			(As Revised)
Indefinite useful lives:
Goodwill	$	53,630	$	43,591
Licenses		72,597		67,523
Tradename		2,215		2,215
		128,442		113,329

	Amortization Period
Definite useful lives:
Discounted leases	18 & 6 years		101		108
Non-compete agreements	5 years		565		588
Software	5 years		315		834
Distribution agreement	3 years		158		264
			1,139		1,794
Total goodwill and other intangible assets		$	129,581	$	115,123

	2019									2018
	Definite- Lived Intangibles			Indefinite- Lived Intangibles			Goodwill			Definite- Lived Intangibles			Indefinite- Lived Intangibles			Goodwill
																(As Revised)
Beginning balance	$	1,794		$	69,738		$	43,591		$	1,565		$	72,859		$	43,866
Acquisitions		243			5,252			11,677			483			-			559
Impairment		-			(178	)		(1,638	)		-			(3,121	)		(834	)
Amortization		(898	)		-			-			(254	)		-			-
Ending balance	$	1,139		$	74,812		$	53,630		$	1,794		$	69,738		$	43,591

As of September 30, 2019 and 2018, the accumulated impairment balance of indefinite-lived intangibles was $6.1 million and $5.9 million, respectively, while the accumulated impairment balance of goodwill was $6.3 million and $4.7 million, respectively. Future amortization expense related to definite-lived intangible assets that are subject to amortization at September 30, 2019 is: 2020 - $519,000; 2021 - $353,000; 2022 - $134,000; 2023 - $59,000; 2024 - $11,000; and thereafter - $63,000.

Indefinite-lived intangible assets consist of sexually oriented business licenses and tradename, which were obtained as part of acquisitions. These licenses are the result of zoning ordinances, thus are valid indefinitely, subject to filing annual renewal applications, which are done at minimal costs to the Company. The discounted cash flow of the income approach method was used in calculating the value of these licenses in a business combination, while the relief from royalty method was used in calculating the value of tradenames. During the fiscal year ended September 30, 2019, the Company recognized a $178,000 impairment related to one club’s SOB license and a $1.6 million impairment related to the goodwill of four reporting units. During the fiscal year ended September 30, 2018, the Company recognized a $3.1 million impairment related to three clubs’ SOB licenses and an $834,000 impairment related to the goodwill of two reporting units. During the year ended September 30, 2017, the Company recognized an impairment loss of $4.7 million related to the goodwill of four reporting units, including one held for sale, as well as an impairment loss of $1.4 million related to two locations’ SOB licenses. See Note 17.