Note 7. Goodwill, Intangible Assets and Long-Lived Assets
Changes in the gross carrying value of goodwill and intangible assets result from changes in foreign currency exchange rates, business acquisitions, divestitures and impairment charges. The changes in the carrying amount of goodwill for the years ended August 31, 2025 and 2024 by operating segment are as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| IT&S | | Other | | Total |
| Balance as of August 31, 2023 | $ | 255,285 | | | $ | 11,209 | | | $ | 266,494 | |
| Impact of changes in foreign currency rates | 3,103 | | | — | | | 3,103 | |
| Balance as of August 31, 2024 | 258,388 | | | 11,209 | | | 269,597 | |
| DTA Acquisition | 14,684 | | | — | | | 14,684 | |
| Impact of changes in foreign currency rates | 5,506 | | | — | | | 5,506 | |
| Balance as of August 31, 2025 | $ | 278,578 | | | $ | 11,209 | | | $ | 289,787 | |
The gross carrying value and accumulated amortization of the Company’s intangible assets are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Weighted Average Amortization Period (Year) | | August 31, 2025 | | August 31, 2024 |
| | | Gross | | Accumulated Amortization | | Net Book Value | | Gross | | Accumulated Amortization | | Net Book Value |
| Amortizable intangible assets: | | | | | | | | | | | | | | |
| Customer relationships | | 14 | | $ | 115,055 | | | $ | 104,083 | | | $ | 10,972 | | | $ | 109,582 | | | $ | 99,530 | | | $ | 10,052 | |
| Patents | | 12 | | 11,193 | | | 9,796 | | | 1,397 | | | 9,916 | | | 9,408 | | | 508 | |
| Developed Technology | | 7 | | 10,283 | | | 1,469 | | | 8,814 | | | — | | | — | | | — | |
| Trademarks and tradenames | | 7 | | 7,291 | | | 3,100 | | | 4,191 | | | 2,764 | | | 2,308 | | | 456 | |
| Indefinite lived intangible assets: | | | | | | | | | | | | | | |
| Tradenames | | N/A | | 21,568 | | | — | | | 21,568 | | | 25,042 | | | — | | | 25,042 | |
| | | | $ | 165,390 | | | $ | 118,448 | | | $ | 46,942 | | | $ | 147,304 | | | $ | 111,246 | | | $ | 36,058 | |
The Company estimates amortization expense for future years to be: $5.8 million in fiscal 2026, $5.7 million in fiscal 2027, $3.6 million in fiscal 2028, $3.5 million in fiscal 2029, $2.6 million in fiscal 2030, $2.0 million in fiscal 2031 and $2.3 million in aggregate thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures or changes in foreign currency exchange rates, among other causes.
In conjunction with our annual goodwill impairment assessment, the Company did not record any charges in fiscal 2025 or 2024.
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.