Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets arose from an acquisition made prior to 2013 and the acquisition of KVH Media Group (acquired as Headland Media Limited) in May 2013. Intangibles arising from the acquisition made prior to 2013 were amortized on a straight-line basis over an estimated useful life of 7 years. Intangibles arising from the acquisition of KVH Media Group are being amortized on a straight-line basis over the estimated useful life of: (i) 10 years for acquired subscriber relationships and (ii) 15 years for distribution rights. Due to the impairment of distribution rights during the Company's 2020 annual impairment test, the estimated useful life of distribution rights was reduced from 15 years to 1 year. The intangibles arising from the KVH Media Group acquisition were recorded in pounds sterling and fluctuations in exchange rates cause these amounts to increase or decrease from time to time.

In January 2017, the Company completed the acquisition of certain subscriber relationships from a third party. This acquisition did not meet the definition of a business under ASC 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business, which the Company adopted on October 1, 2016. The Company ascribed $100 of the initial purchase price to the acquired subscriber relationships definite-lived intangible assets with an initial estimated useful life of 10 years. Under the asset purchase agreement, the purchase price includes a component of contingent consideration under which the Company is required to pay a percentage of recurring revenues received from the acquired subscriber relationships through 2026 up to a maximum annual payment of $114. As of December 31, 2021, the carrying value of the intangible assets acquired in the asset acquisition was $408. As the acquisition did not represent a business combination, the contingent consideration arrangement is recognized only when the contingency is resolved and the consideration is paid or becomes payable. The amounts payable under the contingent consideration arrangement, if any, will be included in the measurement of the cost of the acquired subscriber relationships. An additional $62 and $75 of consideration was earned under the contingent consideration arrangement during the years ended December 31, 2021 and 2020, respectively.

Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at December 31, 2021 and 2020, respectively:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
December 31, 2021
Subscriber relationships	$	8,033	$	6,746	$	1,287
Distribution rights	315		315		—
Internally developed software	446		446		—
Proprietary content	153		153		—
Intellectual property	2,284		2,284		—
	$	11,231	$	9,944	$	1,287
December 31, 2020
Subscriber relationships	$	7,977	$	5,958	$	2,019
Distribution rights	311		76		235
Internally developed software	446		446		—
Proprietary content	153		153		—
Intellectual property	2,284		2,284		—
	$	11,171	$	8,917	$	2,254

Amortization expense related to intangible assets was $1,027 and $1,004 for years ended December 31, 2021 and 2020, respectively, and was categorized as general and administrative expense.

As of December 31, 2021, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.5 years and the weighted average remaining useful lives by the definite-lived intangible asset category are as follows:


Intangible Asset			Weighted Average Remaining Useful Life in Years
Subscriber relationships			1.5

Estimated future amortization expense for intangible assets recorded by the Company at December 31, 2021 is as follows:


Years ending December 31,	Amortization Expense
2022	$	782
2023	315
2024	60
2025	60
2026	60
Thereafter	10
Total amortization expense	$	1,287

The changes in the carrying amount of intangible assets during the year ended December 31, 2021 is as follows:


	2021
Balance at December 31, 2020	$	2,254
Amortization expense	(1,027)
Intangibles assets acquired in asset acquisition	62

Foreign currency translation adjustment	(2)
Balance at December 31, 2021	$	1,287

Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. All of the Company's goodwill as of December 31, 2021 relates to its mobile connectivity reportable segment. None of the Company's goodwill is deductible for tax purposes. The changes in the carrying amount of goodwill during the year ended December 31, 2021 is as follows:


	Goodwill
Balance at December 31, 2020	$	6,592

Foreign currency translation adjustment	(22)
Balance at December 31, 2021	$	6,570