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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets The following table sets forth the Company’s acquired intangible assets by major asset class as of December 31, 2021 and December 31, 2020 (in thousands, except for useful life data):
|  |  |  | December 31, 2021 |
|  | Useful life (years) |  | Gross |  |  | Additions |  |  | Accumulated amortization |  |  | Net book value before impairment |  |  | Impairment charges |  |  | Net book value |
Purchased technology |  | 4-10 |  | $ | 5,400 |  |  | $ | 8,129 |  |  | $ | (3,764 | ) |  | $ | 9,765 |  |  | $ | — |  |  | $ | 9,765 |
Customer relationships |  | 3-14 |  |  | 3,975 |  |  |  | 23,985 |  |  |  | (2,816 | ) |  |  | 25,144 |  |  |  |  |  |  |  | 25,144 |
Customer contracts |  | 6 |  |  | 7,000 |  |  |  | — |  |  |  | (2,976 | ) |  |  | 4,024 |  |  | $ | (1,465 | ) |  |  | 2,559 |
Software License |  | 10 |  |  | — |  |  |  | 5,419 |  |  |  | (793 | ) |  |  | 4,626 |  |  | $ | — |  |  |  | 4,626 |
Trademarks/trade names |  | 2 |  |  | 38 |  |  |  | — |  |  |  | (38 | ) |  |  | — |  |  | $ | — |  |  |  | — |
Non-compete |  | 3 |  |  | 283 |  |  |  | — |  |  |  | (196 | ) |  |  | 87 |  |  | $ | — |  |  |  | 87 |
Support agreement |  | 0.5-1 |  |  | 369 |  |  |  | 500 |  |  |  | (869 | ) |  |  | — |  |  | $ | — |  |  |  | — |
Patents |  | 7 |  |  | 600 |  |  |  | — |  |  |  | (150 | ) |  |  | 450 |  |  | $ | — |  |  |  | 450 |
Total |  |  |  | $ | 17,665 |  |  | $ | 38,033 |  |  | $ | (11,602 | ) |  | $ | 44,096 |  |  | $ | (1,465 | ) |  | $ | 42,631 |
|  |  |  | December 31, 2020 |
|  | Useful life (years) |  | Gross |  |  | Additions |  |  | Accumulated amortization |  |  | Net book value before impairment |  |  | Impairment charges |  |  | Net book value |
Purchased technology |  | 4-8 |  | $ | 2,518 |  |  | $ | 2,882 |  |  | $ | (1,612 | ) |  | $ | 3,788 |  |  | $ | — |  |  | $ | 3,788 |
Customer relationships |  | 3-10 |  |  | 3,975 |  |  |  | — |  |  |  | (1,158 | ) |  |  | 2,817 |  |  |  | (411 | ) |  |  | 2,406 |
Customer contracts |  | 6 |  |  | — |  |  |  | 7,000 |  |  |  | (1,242 | ) |  |  | 5,758 |  |  |  | — |  |  |  | 5,758 |
Trademarks/trade names |  | 2 |  |  | 38 |  |  |  | — |  |  |  | (38 | ) |  |  | — |  |  |  | — |  |  |  | — |
Non-compete |  | 3 |  |  | 51 |  |  |  | 232 |  |  |  | (119 | ) |  |  | 164 |  |  |  | — |  |  |  | 164 |
Support agreement |  | 1 |  |  | — |  |  |  | 369 |  |  |  | (323 | ) |  |  | 46 |  |  |  | — |  |  |  | 46 |
Patents |  | 7 |  |  | — |  |  |  | 600 |  |  |  | (64 | ) |  |  | 536 |  |  |  | — |  |  |  | 536 |
Total |  |  |  | $ | 6,582 |  |  | $ | 11,083 |  |  | $ | (4,556 | ) |  | $ | 13,109 |  |  | $ | (411 | ) |  | $ | 12,698 |
Intangible assets amortization expense was $8.1 million and $2.9 million for the years ended December 31, 2021 and 2020, respectively. Future amortization expense related to intangible assets as of December 31, 2021 are as follows (in thousands):
Year Ending December 31, |  |  |  |
2022 |  | $ | 6,311 |
2023 |  |  | 5,874 |
2024 |  |  | 5,635 |
2025 |  |  | 5,402 |
2026 |  |  | 5,007 |
thereafter |  |  | 14,402 |
Total |  | $ | 42,631 |
F-17 During the first quarter of 2021, the Company received a customer contract termination notice related to a customer contract acquired in the acquisition of Circle’s operator business in February 2020, which was otherwise set to expire in the second quarter of 2024. The contract was terminated effective April 15, 2021; however, in accordance with its terms, Smith Micro continues to deliver wind-down services under the contract. While the terms of the contract allow for a wind-down period of up to two years post termination, the Company expects to continue services under this contract through 2022. The Company determined the customer contract should be accounted for under the contract modification guidance in Topic 606. As a result, the Company recognized deferred revenue of $0.6 million, which was being amortized over the customer contract term and is amortizing the remaining $0.3 million over the remaining service period. Additionally, the Company reviewed its customer contract intangible asset associated with this customer contract and determined that the carrying value was in excess of its fair value. Accordingly, the Company recorded a $1.5 million impairment charge within “amortization of intangible assets” in the consolidated statements of operations during the year ended December 31, 2021 and is amortizing the remaining $0.4 million over the remaining service period. Smith Micro reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The annual impairment testing date is December 31. Recoverability of goodwill is determined by comparing the estimated fair value of reporting units to the carrying value of the underlying net assets in the reporting units. If the estimated fair value of a reporting unit is determined to be less than the fair value of its net assets, goodwill is deemed impaired, and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the estimated fair value of the reporting unit and the fair value of its other assets and liabilities. Smith Micro determined that there was not any impairment of the Company’s goodwill at December 31, 2021 and 2020.

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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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