Forestar Group Inc.FOR

Forestar Group Inc. Goodwill & Intangibles Disclosure

10-KFiled Feb 28, 20181 min read
Goodwill and Other Intangible Assets
Carrying value of goodwill and other intangible assets follows:
 
Year-End
 
2017
 
2016
 
(In thousands)
Goodwill
$
—

 
$
37,900

Identified intangibles, net
448

 
—

 
$
448

 
$
37,900


Goodwill related to our mineral assets was $0 at year-end 2017 and $37,900,000 at year-end 2016. In 2017, we recognized a non-cash impairment charge of $37,900,000 related to goodwill attributable to our mineral resources reporting unit as a result of selling our remaining owned mineral assets. In 2016, we recognized a goodwill non-cash impairment charge of $3,874,000 related to interests in groundwater leases in central Texas. Impairment charges are included in cost of mineral resources and cost of other on our consolidated statements of income (loss).
Identified intangibles, net represent indefinite lived groundwater leases associated with our central Texas water assets at year-end 2017 and were included in assets held for sale at year-end 2016. In 2017, we recognized a non-cash impairment charge of $1,233,000 related to the indefinite lived groundwater leases. Impairment charges are included in cost of other on our consolidated statements of income (loss).

Historical Timeline

Fiscal YearFiled
2017Feb 28, 2018Showing above
2016Mar 3, 2017
2015Mar 4, 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.

Other Available Disclosures

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