Alcoa Corp Goodwill & Intangibles Disclosure
L. Goodwill and Other Intangible Assets
Management performed a quantitative assessment for the Alumina reporting unit in the fourth quarter of 2025. As a result of the assessment, the Company recorded a charge of $144 in Impairment of goodwill on the Statement of Consolidated Operations for the year ended December 31, 2025, reducing the amount of goodwill for the Alumina reporting unit to zero.
The goodwill impairment was primarily a result of declining alumina prices, increased capital expenditures primarily related to mine moves and mine reclamation in Australia, and an increase in the discount rate. Following a peak in the fourth quarter of 2024 primarily due to supply disruptions, alumina prices decreased in the first quarter of 2025 and declined further in the fourth quarter of 2025 driven by a global supply surplus, largely due to refinery expansions in China and Indonesia.
Changes in the carrying amount of goodwill in 2025 prior to impairment were attributable to foreign currency translation.
Goodwill, which is included in Other noncurrent assets on the accompanying Consolidated Balance Sheet, was as follows:
December 31, |
|
2025 |
|
|
2024 |
|
||
Alumina |
|
$ |
— |
|
|
$ |
3 |
|
Aluminum |
|
|
— |
|
|
|
— |
|
Corporate(1) |
|
|
— |
|
|
|
139 |
|
|
|
$ |
— |
|
|
$ |
142 |
|
The carrying value of Corporate’s goodwill is net of accumulated impairment losses of $882 and $742 as of December 31, 2025 and December 31, 2024, respectively.
Other intangible assets, which are included in Other noncurrent assets on the accompanying Consolidated Balance Sheet, were as follows:
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
December 31, |
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
||||||
Computer software |
|
$ |
210 |
|
|
$ |
(198 |
) |
|
$ |
12 |
|
|
$ |
203 |
|
|
$ |
(190 |
) |
|
$ |
13 |
|
Patents and licenses |
|
|
25 |
|
|
|
(11 |
) |
|
|
14 |
|
|
|
25 |
|
|
|
(11 |
) |
|
|
14 |
|
Other intangibles |
|
|
21 |
|
|
|
(13 |
) |
|
|
8 |
|
|
|
20 |
|
|
|
(11 |
) |
|
|
9 |
|
Total other intangible assets |
|
$ |
256 |
|
|
$ |
(222 |
) |
|
$ |
34 |
|
|
$ |
248 |
|
|
$ |
(212 |
) |
|
$ |
36 |
|
Computer software consists primarily of software costs associated with the enterprise business solution within Alcoa to drive common systems among all businesses.
Amortization expense related to the intangible assets in the table above for the years ended December 31, 2025, 2024, and 2023 was $6, $5, and $5, respectively, and is expected to be approximately $5 annually from 2026 to 2030.
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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.