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Intangible Assets | 3 Months Ended
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Apr. 30, 2022
Intangible Assets |
Intangible Assets | (4) Intangible Assets Intangible assets consisted of the following (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | April 30, 2022 (Successor) | ​ | January 31, 2022 (Predecessor (SLH))
​ |  | Gross |  | ​ | ​ |  | Net |  | Gross |  | ​ | ​ |  | Net
​ | ​ | Carrying | ​ | Accumulated | ​ | Carrying | ​ | Carrying | ​ | Accumulated | ​ | Carrying
​ | ​ | Amount | ​ | Amortization | ​ | Amount | ​ | Amount | ​ | Amortization | ​ | Amount
Developed software/ courseware | ​ | $ | 376,066 | ​ | $ | 66,005 | ​ | $ | 310,061 | ​ | $ | 315,856 | ​ | $ | 47,323 | ​ | $ | 268,533
Customer contracts/ relationships | ​ |  | 396,400 | ​ |  | 22,167 | ​ |  | 374,233 | ​ |  | 386,400 | ​ |  | 12,902 | ​ |  | 373,498
Vendor relationships | ​ |  | 43,900 | ​ |  | 25,492 | ​ |  | 18,408 | ​ | ​ | 43,900 | ​ | ​ | 21,219 | ​ | ​ | 22,681
Trademarks and trade names | ​ |  | 51,300 | ​ |  | 1,234 | ​ |  | 50,066 | ​ |  | 7,300 | ​ |  | 780 | ​ |  | 6,520
Publishing rights | ​ |  | 41,100 | ​ |  | 7,284 | ​ |  | 33,816 | ​ |  | 41,100 | ​ |  | 5,229 | ​ |  | 35,871
Backlog | ​ |  | 60,900 | ​ |  | 15,051 | ​ |  | 45,849 | ​ |  | 60,900 | ​ |  | 6,554 | ​ |  | 54,346
Skillsoft trademark | ​ |  | 84,700 | ​ | ​ | — | ​ |  | 84,700 | ​ |  | 84,700 | ​ | ​ | — | ​ |  | 84,700
Global Knowledge trademark | ​ |  | 25,400 | ​ | ​ | 2,808 | ​ |  | 22,592 | ​ | ​ | 25,400 | ​ | ​ | 2,062 | ​ | ​ | 23,338
Total | ​ | $ | 1,079,766 | ​ | $ | 140,041 | ​ | $ | 939,725 | ​ | $ | 965,556 | ​ | $ | 96,069 | ​ | $ | 869,487
​ Amortization expense related to the existing finite-lived intangible assets is expected to be as follows (in thousands): ​
​ | ​ | ​ | ​
Fiscal Year |  | Amortization Expense
2023 (remaining 9 months) | ​ | $ | 142,028
2024 | ​ |  | 165,083
2025 | ​ | ​ | 141,573
2026 | ​ | ​ | 135,341
2027 | ​ |  | 87,270
Thereafter | ​ |  | 183,730
Total | ​ | $ | 855,025
​ Amortization expense related to intangible assets in the aggregate was $43.9 million and $34.9 million for the three months ended April 31, 2022 (Successor) and April 30, 2021 (Predecessor (SLH)), respectively. Fresh-start Reporting for Intangible Assets (Predecessor (SLH)) ​ In accordance with ASC 852, with the application of fresh-start reporting, the Company allocated its reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, including those of intangible assets. Intangible assets were measured based upon estimates of the future performance and cash from the Successor Company at emergence. Values and useful lives assigned to intangible assets were based on estimated value and use of these assets by a market participant. The customer contracts/relationships and backlog were valued using the income approach. The trademarks and trade names were valued using the relief from royalty method. The income approach determines fair value by estimating the after-tax cash flows attributable to an identified asset over its useful life (Level 3 inputs) and then discounting these after-tax cash flows back to a present value. The developed software/courseware and publishing rights were valued using the replacement cost approach. The cost approach determines fair value by estimating the cost to replace or reproduce an asset at current prices and is reduced for functional and economic obsolescence. Impairment of Goodwill and Intangible Assets ​ Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill in fresh-start accounting results when the reorganization value of the emerging entity exceeds what can be attributed to specific tangible or identified intangible assets. The Company tests goodwill for impairment during the fourth quarter every year in accordance with ASC 350, Intangibles — Goodwill (“ASC 350”). In connection with the impairment evaluation, the Company may first consider qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. Performing a quantitative goodwill impairment test is not necessary if an entity determines based on this assessment that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company fails or elects to bypass the qualitative assessment, the goodwill impairment test must be performed. This test requires a comparison of the carrying value of the reporting unit to its estimated fair value. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference is recorded, not to exceed the amount of goodwill allocated to the reporting unit. In determining reporting units, the Company first identifies its operating segments, and then assesses whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. ​ Intangible assets arising from business combinations are generally recorded based upon estimates of the future performance and cash flows from the acquired business. The Company uses an income approach to determine the estimated fair value of certain identifiable intangible assets including customer relationships and trade names and uses a cost approach for other identifiable intangible assets, including developed software/courseware. The income approach determines fair value by estimating the after-tax cash flows attributable to an identified asset over its useful life (Level 3 inputs) and then discounting these after-tax cash flows back to a present value. The cost approach determines fair value by estimating the cost to replace or reproduce an asset at current prices and is reduced for functional and economic obsolescence. Developed technology represents patented and unpatented technology and know-how. Customer contracts and relationships represents established relationships with customers, which provide a ready channel for the sale of additional content and services. Trademarks and tradenames represent acquired product names and marks that the Company intends to continue to utilize. ​ The Company reviews intangible assets subject to amortization at least annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in remaining useful life. Conditions that would indicate impairment and trigger a more frequent impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, or an adverse action or assessment by a regulator. The Company reviews indefinite-lived intangible assets, including goodwill and certain trademarks, during the fourth quarter of each year for impairment, or more frequently if certain indicators are present or changes in circumstances suggest that impairment may exist and reassesses their classification as indefinite-lived assets. ​ During the three months ended April 30, 2022, the Global Knowledge business experienced a decline in bookings compared to the corresponding period in the prior year, which will likely lead to lower revenue for the reporting unit for the three months ended July 31, 2022 due to the lag of bookings converting into GAAP revenue. When considering whether events or changes in circumstances might indicate that the carrying amount of Global Knowledge reporting unit goodwill and other intangible assets may not be recoverable, the Company concluded that no such events and changes in circumstances were present during the three months ended April 30, 2022 since its long-term outlook for the Global Knowledge business has not changed as the Company continues to invest in its salesforce and product offerings. Based on these considerations, management does not believe there are indicators of impairment as of April 30, 2022. In the event the Company continues to experience operating performance in its Global Knowledge business that is below its expectations in future periods, such factors could result in a decline in the fair value of the reporting unit, and the Company may be required to record impairments of goodwill and other identified intangible assets. ​ A roll forward of goodwill is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Description |  | Skillsoft |  | SumTotal |  | GK |  | Consolidated
Goodwill, net January 31, 2022 (Successor) | ​ | $ | 680,500 | ​ | $ | 75,693 | ​ | $ | 115,311 | ​ | $ | 871,504
Foreign currency translation adjustment | ​ | ​ | (102) | ​ | ​ | (99) | ​ | ​ | (730) | ​ | ​ | (931)
Acquisition of Codecademy | ​ | ​ | 309,967 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 309,967
Measurement period adjustments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (614) | ​ | ​ | (614)
Goodwill, net April 30, 2022 (Successor) | ​ | $ | 990,365 | ​ | $ | 75,594 | ​ | $ | 113,967 | ​ | $ | 1,179,926
​ As of April 30, 2022 and January 31, 2022, there were no accumulated impairment losses for the Skillsoft, SumTotal or Global Knowledge segments.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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