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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Note 7. Goodwill and Intangible Assets When the Company acquired the trade assets of Motorola Solutions, Inc.’s wireless point-to-point and point-to-multi-point businesses, the transaction generated goodwill and certain intangible assets. The goodwill associated with this transaction was recorded by Cambium Networks Corporation and allocated to Cambium Networks, Ltd. and Cambium Networks, Inc. using a revenue and asset allocation method. Although goodwill has been allocated to two operating subsidiaries, as noted in Note 16 – Segment information and revenues by geography, the Company operates as one operating segment and one reporting unit and therefore, goodwill is reported, and impairment testing performed, at the Cambium Networks Corporation consolidated level. See Note 2 – Business combinations for further information regarding the acquisition completed during 2019. The change in the carrying amount of goodwill for the year ended and nine-month period ended was as follows (in thousands):
|  | December 31, |  |  | September 30, |
|  | 2019 |  |  | 2020 |
|  |  |  |  |  | (unaudited) |
Beginning balance |  | $ | 8,060 |  |  | $ | 8,552 |
Additions attributable to acquisition |  |  | 492 |  |  |  | — |
Acquisition adjustments |  |  | — |  |  |  | 1,290 |
Ending balance |  | $ | 8,552 |  |  | $ | 9,842 |
The Company tests goodwill and intangible assets for impairment annually on December 31 and more frequently if impairment indicators exist. Accordingly, the Company performs quarterly qualitative assessments of significant events and circumstances such as a reporting unit’s historical and current results, assumptions regarding future performance, strategic initiatives and overall economic factors, including the impact of the current global outbreak of the coronavirus (or COVID-19) and macro-economic developments, to determine the existence of potential indicators of impairment and assess if it is more likely than not that the fair value of the reporting unit or intangible asset is less than their carrying value. If indicators of impairment are identified, a quantitative impairment test is performed. Qualitative assessments for the quarter did not indicate the existence of impairment indicators. Based on the operating results for the nine-month period ended September 30, 2020 and other considerations, the Company believes that it is more likely than not that the enterprise value for its one reporting unit and the fair value of intangibles is still greater than their carrying values. Accordingly, no goodwill impairment indicators were present at September 30, 2020 that would necessitate an interim impairment assessment. The Company will continue to monitor business performance and economic conditions, particularly the impact of the COVID-19 pandemic, throughout 2020 to determine if an interim evaluation should be conducted. The useful life, gross carrying value, accumulated amortization, and net balance for each major class of definite-lived intangible assets at each balance sheet date were as follows (in thousands):
|  |  |  | December 31, 2019 |  |  | September 30, 2020 |
|  | Useful Life |  | Gross carrying amount |  |  | Accumulated amortization |  |  | Net balance |  |  | Gross carrying amount |  |  | Accumulated amortization |  |  | Net balance |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |
Unpatented technology |  | 3 - 7 years |  | $ | 14,660 |  |  | $ | (14,195 | ) |  | $ | 465 |  |  | $ | 14,660 |  |  | $ | (14,330 | ) |  | $ | 330 |
Customer relationships |  | 5 - 18 years |  |  | 19,300 |  |  |  | (5,631 | ) |  |  | 13,669 |  |  |  | 19,300 |  |  |  | (6,754 | ) |  |  | 12,546 |
Patents |  | 7 years |  |  | 11,300 |  |  |  | (11,300 | ) |  |  | — |  |  |  | 11,300 |  |  |  | (11,300 | ) |  |  | — |
Trademarks |  | 10 years |  |  | 5,270 |  |  |  | (4,304 | ) |  |  | 966 |  |  |  | 5,270 |  |  |  | (4,700 | ) |  |  | 570 |
Total |  |  |  | $ | 50,530 |  |  | $ | (35,430 | ) |  | $ | 15,100 |  |  | $ | 50,530 |  |  | $ | (37,084 | ) |  | $ | 13,446 |
Intangible assets are amortized over their expected useful life and none are expected to have a significant residual value at the end of their useful life. Intangible assets amortization expense was $0.4 million and $0.6 million for the three-month periods ended September 30, 2019 and 2020, respectively, and $1.0 million and $1.7 million for the nine-month periods ended September 30, 2019 and 2020, respectively. Based on capitalized intangible assets as of September 30, 2020, estimated amortization expense amounts in future fiscal years are as follows (unaudited and in thousands):
Year ending December 31, |  | Amortization |
2020 (October - December) |  | $ | 552 |
2021 |  |  | 2,118 |
2022 |  |  | 1,603 |
2023 |  |  | 1,498 |
2024 |  |  | 1,498 |
Thereafter |  |  | 6,177 |
Total amortization |  | $ | 13,446 |

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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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