AMCON DISTRIBUTING CO Goodwill & Intangibles Disclosure
6. GOODWILL AND OTHER INTANGIBLE ASSETS:
Goodwill at September 2025 and September 2024 was as follows:
| September |
| September | |||
2025 | 2024 | |||||
Wholesale Segment | $ | 5,778,325 | $ | 5,778,325 | ||
Other intangible assets at September 2025 and September 2024 consisted of the following:
| September |
| September | |||
2025 | 2024 | |||||
Customer lists (Wholesale Segment) (less accumulated amortization of $0.7 million at September 2025 and $0.5 million at September 2024) | $ | 2,766,216 | $ | 2,996,348 | ||
Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.3 million at September 2025 and $0.2 million at September 2024) | 44,333 | 106,505 | ||||
Tradename (Wholesale Segment) (less accumulated amortization of $0.6 million at September 2025 and $0.4 million at September 2024) | 929,810 | 1,144,381 | ||||
Trademarks and tradenames (Retail Segment) | 500,000 | 500,000 | ||||
$ | 4,240,359 | $ | 4,747,234 | |||
Goodwill, trademarks and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. Goodwill recorded on the Company’s consolidated balance sheets represents amounts allocated to its wholesale reporting unit which totaled approximately $5.8 million at both September 2025 and September 2024. The Company determined that the estimated fair value of its wholesale reporting unit exceeded its carrying value at both September 2025 and September 2024.
At September 2025, identifiable intangible assets considered to have finite lives were represented by customer lists which are being amortized over 15 years, a non-competition agreement which is being amortized over five years, and a tradename in our Wholesale Segment that is being amortized over seven years. These intangible assets are evaluated for accelerated attrition or amortization adjustments if warranted. Amortization expense related to these assets was $0.5 million during both fiscal 2025 and fiscal 2024, respectively.
Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at September 2025:
September | |||
| 2025 | ||
Fiscal 2026 | $ | 463,703 | |
Fiscal 2027 | 463,703 | ||
Fiscal 2028 | 451,037 | ||
Fiscal 2029 | 444,703 | ||
Fiscal 2030 | 301,656 | ||
Fiscal 2031 and thereafter | 1,615,557 | ||
$ | 3,740,359 | ||
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.