Maiden Holdings, Ltd.MHLA

Maiden Holdings, Ltd. Goodwill & Intangibles Disclosure

10-KFiled Mar 15, 20192 min read
Goodwill and Intangible Assets
The goodwill and intangible assets historically recognized by the Company had been assigned to our Diversified Reinsurance segment. Please refer to "Note 6. Discontinued Operations" for further details regarding the impairment of these assets. The following table shows the change in the carrying value of goodwill and intangible assets previously held by the Company:
 
 
Goodwill
 
Intangible Assets
 
Total
December 31, 2016
 
$
57,192

 
$
20,523

 
$
77,715

Amortization
 
—

 
(2,132
)
 
(2,132
)
December 31, 2017
 
$
57,192

 
$
18,391

 
$
75,583

Amortization
 
—

 
(1,387
)
 
(1,387
)
Impairment losses
 
(57,192
)
 
(17,004
)
 
(74,196
)
December 31, 2018
 
$
—

 
$
—

 
$
—


The goodwill and intangible assets are subject to annual impairment testing on October 1 or when “triggering events” occur or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount. Goodwill is considered impaired if the carrying amount of the reporting unit exceeds the fair value. The sale of our U.S. treaty reinsurance operations resulted in a triggering event and consequently during the year ended December 31, 2018, the Company has written off the remaining balance of goodwill and intangible assets. The goodwill and intangible assets were deemed to be permanently impaired due to the sale of the U.S. treaty reinsurance operations. The Company recognized an impairment loss of $74,196 as a result of these dispositions, which is presented in the Consolidated Statements of Income as part of the loss from discontinued operations for the year ended December 31, 2018 (2017 - $0, 2016 - $1,800).
The following tables show the analysis of goodwill and intangible assets that are included in the balance sheet as a component of assets held for sale at December 31, 2017:
December 31, 2017
 
Gross
 
Accumulated Amortization
 
Accumulated Impairment
 
Net
 
Useful Life
Goodwill
 
$
58,992

 
$
—

 
$
(1,800
)
 
$
57,192

 
Indefinite
State licenses
 
4,527

 
—

 
—

 
4,527

 
Indefinite
Customer relationships
 
51,400

 
(37,536
)
 
—

 
13,864

 
15 years double declining
Net balance
 
$
114,919

 
$
(37,536
)
 
$
(1,800
)
 
$
75,583

 
 

Historical Timeline

Fiscal YearFiled
2018Mar 15, 2019Showing above
2017Mar 1, 2018
2016Mar 6, 2017
2015Mar 1, 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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