Goodwill and Purchased Intangible Assets
|9 Months Ended
Mar. 31, 2018
|Goodwill and Intangible Assets Disclosure [Abstract]
|GOODWILL AND PURCHASED INTANGIBLE ASSETS
NOTE 6 – GOODWILL AND PURCHASED INTANGIBLE ASSETS
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in prior business combinations. The Company has four reporting units: Wafer Inspection, Patterning, Global Service and Support, and Others. The following table presents goodwill balances and the movements by reporting unit during the nine months ended March 31, 2018:
Goodwill is net of accumulated impairment losses of $277.6 million, which were recorded prior to the fiscal year ended June 30, 2014.
The Company performed a qualitative assessment of the goodwill by reporting unit during the three months ended March 31, 2018 and concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. As a result of the Company’s determination following its qualitative assessment, it was not necessary to perform the quantitative goodwill impairment test at this time. In assessing the qualitative factors, the Company considered the impact of key factors, including changes in the industry and competitive environment, market capitalization, stock price, earnings multiples, budgeted-to-actual revenue performance from prior year, gross margin and cash flows from operating activities.
Based on the Company’s assessment, goodwill in the reporting units was not impaired as of March 31, 2018 or June 30, 2017.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
For the three months ended March 31, 2018 and 2017, amortization expense for purchased intangible assets was $1.2 million and $0.5 million, respectively. For the nine months ended March 31, 2018 and 2017, amortization expense for purchased intangible assets was $3.6 million and $2.3 million, respectively. Based on the intangible assets recorded as of March 31, 2018, and assuming no subsequent additions to, or impairment of, the underlying assets, the remaining estimated amortization expense is expected to be as follows: