CARRIAGE SERVICES INCCSV

CARRIAGE SERVICES INC Goodwill & Intangibles Disclosure

10-KFiled Mar 1, 20242 min read
GOODWILL
Many of the former owners and staff of our acquired funeral homes and certain cemeteries have provided high quality service to families for generations, which often represents a substantial portion of the value of a business. The excess of the purchase price over the fair value of identifiable net assets of funeral home businesses and cemeteries acquired is recorded as goodwill.
The following table presents changes in goodwill in the accompanying Consolidated Balance Sheet (in thousands): 
December 31, 2022December 31, 2023
Goodwill at the beginning of year$391,972 $410,137 
Increase in goodwill related to acquisitions19,511 13,506 
Decrease in goodwill related to divestitures(901)— 
Decrease in goodwill related to assets held for sale(445)— 
Goodwill at the end of the year$410,137 $423,643 
During the year ended December 31, 2023, we recognized $13.5 million in goodwill related to our acquisition of a business located in Bakersfield, CA, of which $4.5 million was allocated to our cemetery segment and $9.0 million was allocated to our funeral home segment.
During the year ended December 31, 2022, we recognized $19.5 million in goodwill related to our 2022 business acquisitions, of which $7.4 million was allocated to our cemetery segment and $12.1 million was allocated to our funeral home segment.
Additionally, during the year ended December 31, 2022, we allocated $0.9 million of goodwill to the sale of two funeral homes for a loss recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations. We also recorded a $0.4 million goodwill impairment related to one funeral home and two cemeteries that were classified as held for sale at the balance sheet date, which was recorded in Net loss on divestitures, disposals and impairment charges in our Consolidated Statements of Operations.
See Notes 1, 3, and 5 to the Consolidated Financial Statements for a discussion of the methodology used for our annual goodwill impairment test and a discussion of our acquisitions and divestitures.

Historical Timeline

Fiscal YearFiled
2023Mar 1, 2024Showing above
2022Mar 1, 2023
2021Mar 2, 2022
2020Mar 2, 2021
2019Feb 28, 2020
2018Feb 28, 2019
2017Feb 21, 2018
2016Feb 23, 2017
2015Feb 23, 2016

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.

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