NOTE 5 – GOODWILL AND OTHER INTANGIBLE ASSETS

We accounted for our historical acquisitions in accordance with ASC 805, Business Combinations. We recorded the amount exceeding the fair value of net assets acquired at the date of acquisition as goodwill. We recorded intangible assets apart from goodwill if the assets had contractual or other legal rights or if the assets could be separated and sold, transferred, licensed, rented or exchanged. Our goodwill relates to the following acquisitions: ADI and Legiant in 2011, PeopleCube in 2012, FotoPunch and Roomtag in 2014, Mangrove in 2016, PMSI, CPI and PSNW in January 2017, iSystems and Compass in May 2017, ADS in October 2017, and TelePayroll, Pay Systems, and Savers Admin in January 2018.

In accordance with ASC 350, Intangibles-Goodwill and Other, we review and evaluate our long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that we may not recover their net book value. We test goodwill for impairment on an annual basis in the fourth fiscal quarter of each year, and between annual tests, if indicators of potential impairment exist, using a fair-value-based approach. There has been no impairment of goodwill for the periods presented. We amortize intangible assets not considered to have an indefinite useful life using the straight-line method over their estimated period of benefit, which generally ranges from one to nine years. Each reporting period, we evaluate the estimated remaining useful life of intangible assets and assess whether events or changes in circumstances warrant a revision to the remaining period of amortization or indicate that impairment exists. We have not identified any impairments of finite-lived intangible assets during any of the periods presented.

The following table summarizes the changes in our goodwill:

Balance at December 31, 2017	$	77,348
Goodwill recognized upon acquisitions of Telepayroll, Pay Systems and Savers Admin		13,566
Adjustment to Goodwill associated with acquisitions of Compass, ADS, iSystems and PMSI		81
Foreign exchange adjustment to goodwill		3
Balance at March 31, 2018	$	90,998

The gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2018 and December 31, 2017 are as follows:

			March 31, 2018
Intangible Assets	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net

Developed Technology		6.7	$	11,925	$	(5,446	)	$	6,479
Customer Relationships		9.4		52,896		(14,394	)		38,502
Reseller Relationships		7.00		853		(792	)		61
Trade Names		11.4		3,765		(953	)		2,812
Noncompete		5.1		1,022		(211	)		811
		8.9	$	70,461	$	(21,796	)	$	48,665

			December 31, 2017
Intangible Assets	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net

Developed Technology		6.7	$	11,925	$	(5,010	)	$	6,915
Customer Relationships		9.5		37,096		(13,142	)		23,954
Reseller Relationships		7.0		853		(761	)		92
Trade Names		10.4		2,915		(884	)		2,031
Noncompete Agreements		6.1		692		(130	)		562
		8.8	$	53,481	$	(19,927	)	$	33,554

We record amortization expenses using the straight-line method over the estimated useful lives of the intangible assets, as noted above. Amortization expenses for the three months ended March 31, 2018 and 2017 were $1,597 and $847, respectively, included in Operating Expenses. Amortization expenses recorded in Cost of Sales were $297 and $106 for the three months ended March 31, 2018 and 2017, respectively.

The following table summarizes the future estimated amortization expense relating to our intangible assets as of March 31, 2018:

Calendar Years
2018 (April to December)	$	5,542
2019		6,697
2020		5,862
2021		5,420
2022		5,328
2023		4,496
Thereafter		15,320
	$	48,665