Healthcare Triangle, Inc. Goodwill & Intangibles Disclosure
Goodwill
Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed.
Goodwill for FY 2023 is written down by $0.12 million on account of reversal of contingent consideration of Devcool due to non-achievement of said targets as per “Share Purchase Agreement”.
The Company performs its annual goodwill impairment test as of January 30, 2024, management has identified a significant change in circumstances arising from the loss of a major customer within our wholly owned subsidiary, Devcool Inc. Historically, this customer has accounted for approximately 45% to 50% of the Company’s business. However, recent developments have led to a substantial reduction in transactions with the company.
Based on the impairment assessment, it was determined that the carrying amount of goodwill exceeded its implied fair value, primarily due to the adverse impact of the loss of the major customer on the Company’s future cash flows and overall financial performance. Accordingly, a non-recurring impairment loss of $1.17 million has been recognized in the financial statements for the reporting period ending on that date.
The Company’s annual goodwill impairment test resulted in impairment of $1.29 million for the year ended December 31, 2023 and 0 for December 31, 2022.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 18, 2024 | Showing above |
| 2022 | Mar 28, 2023 | |
| 2021 | Mar 8, 2022 | |
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.