GD Culture Group Ltd Goodwill & Intangibles Disclosure
Note 11 – Goodwill
In connection with the disposal of Highlight Media and Wuge, the goodwill recognized from acquisition of Highlight Media and Wuge were impaired in full. The changes in the carrying amount of goodwill by business units for the years ended December 31, 2023 and 2022 were as follows:
| Highlight Media | Wuge | Total | ||||||||||
| Balance as of December 31, 2021 | $ | $ | 6,590,339 | $ | 6,590,339 | |||||||
| Goodwill acquired through acquisition | 2,190,485 | 2,190,485 | ||||||||||
| Goodwill impairments | (6,590,339 | ) | (6,590,339 | ) | ||||||||
| Balance as of December 31, 2022 | $ | 2,190,485 | $ | $ | 2,190,485 | |||||||
| Goodwill impairments | (2,190,485 | ) | (2,190,485 | ) | ||||||||
| Balance as of December 31, 2023 | $ | $ | $ | |||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Apr 2, 2024 | Showing above |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 26, 2021 | |
| 2019 | Apr 17, 2020 | |
| 2018 | Apr 1, 2019 | |
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.