EDAP TMS SA Goodwill & Intangibles Disclosure
9— GOODWILL AND INTANGIBLE ASSETS
As discussed in Note 1-13, ASC 350 requires that goodwill not be amortized but instead be tested at least annually for impairment, or more frequently when events or change in circumstances indicate that the asset might be impaired, by comparing the carrying value to the fair value of the reporting unit to which they are assigned. The Company considers its ASC 280 operating segments — High Intensity Focused Ultrasound (HIFU), Lithotripsy (ESWL) and Distribution services (DIST) — to be its reporting units for purposes of testing for impairment. Goodwill amounts to $583 thousand for the ESWL division, $1,493 thousand for the DIST division and to $757 thousand for the HIFU division, at December 31, 2025.
The Company completed the required annual impairment test in the fourth quarter of 2025 . To determine the fair value of the Company’s reporting units, the Company used the discounted cash flow approach for each of the three reportable units. In all three cases, the fair value of the reporting unit was in excess of the reporting unit’s book value, which resulted in no goodwill impairment.
Intangible assets consist of the following:
December 31, | ||||
| 2025 | | 2024 | |
Licenses |
| 3,564 |
| 2,412 |
Trade name and trademark |
| 333 |
| 332 |
Patents |
| 484 |
| 428 |
Organization costs |
| 264 |
| 234 |
Total gross value |
| 4,644 |
| 3,405 |
Accumulated amortization for licenses |
| (1,721) |
| (1,287) |
Accumulated amortization for trade name and trademark |
| (379) |
| (330) |
Accumulated amortization for patents |
| (484) |
| (428) |
Accumulated amortization for organization costs |
| (264) |
| (234) |
Less: Total accumulated amortization |
| (2,848) |
| (2,278) |
Total |
| 1,796 |
| 1,127 |
Amortization expenses related to intangible assets amounted to $304 thousand and $238 thousand, for the years ended December 31, 2025 and 2024, respectively. In 2025, Licences also includes implementation costs for SAP in the United States for $761 thousand.
For the five coming years, the annual estimated amortization expense will consist of the following:
| December 31, | |
| 2025 | |
2026 |
| 268 |
2027 |
| 248 |
2028 |
| 138 |
2029 |
| 107 |
2030 |
| 100 |
2031 and thereafter | 209 | |
Total |
| 1,071 |
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.