MKS INC Goodwill & Intangibles Disclosure
The Company’s methodology for allocating the purchase price of an acquisition is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the cost of the acquisition over the sum of
the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. The Company assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process.
Goodwill and intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. To measure impairment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, no impairment exists. If the fair value of the reporting unit is less than the carrying value of the reporting unit, a goodwill impairment is recorded.
Amortizable intangible assets and other long-lived assets are also subject to an impairment test if there is an indicator of impairment. When the Company determines that the carrying value of intangible assets or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, the Company uses the projected undiscounted cash flow method to determine whether an impairment exists, and then measures the impairment using discounted cash flows.
The process of evaluating the potential impairment of goodwill, intangible assets and other long-lived assets requires significant judgment. The Company regularly monitors current business conditions and other factors, including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. The Company’s stock price and any estimated control premium are factors affecting the assessment of the fair value of the Company’s underlying reporting units for purposes of performing any goodwill impairment assessment.
Goodwill
Effective January 1, 2025, the Company reassigned goodwill to certain reporting units within PSD resulting from a reorganization of the business. The goodwill was reassigned to the new reporting units using the relative fair value approach. The Company also concluded that the fair value of each reporting unit immediately before and after the reorganization exceeded its respective carrying value.
Goodwill associated with each of the Company’s reportable segments was as follows:
|
|
VSD |
|
|
PSD |
|
|
MSD |
|
|
Total |
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||||
Reportable segment: |
|
|
|
|
|
|
|
|
|
|
|
|
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Gross goodwill at December 31, 2024 |
|
$ |
358 |
|
|
$ |
1,003 |
|
|
$ |
2,951 |
|
|
$ |
4,312 |
|
Foreign currency translation adjustments |
|
|
— |
|
|
|
9 |
|
|
|
86 |
|
|
|
95 |
|
Gross goodwill at December 31, 2025 |
|
|
358 |
|
|
|
1,012 |
|
|
|
3,037 |
|
|
|
4,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accumulated goodwill impairment at December 31, 2024 |
|
|
(141 |
) |
|
|
(390 |
) |
|
|
(1,302 |
) |
|
|
(1,833 |
) |
Impairment charge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accumulated goodwill impairment at December 31, 2025 |
|
|
(141 |
) |
|
|
(390 |
) |
|
|
(1,302 |
) |
|
|
(1,833 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill, net of accumulated impairment and foreign currency translation adjustments at December 31, 2025 |
|
$ |
217 |
|
|
$ |
622 |
|
|
$ |
1,735 |
|
|
$ |
2,574 |
|
|
|
VSD |
|
|
PSD |
|
|
MSD |
|
|
Total |
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||||
Reportable segment: |
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|
|
|
|
|
|
|
|
|
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Gross goodwill at December 31, 2023 |
|
$ |
335 |
|
|
$ |
1,031 |
|
|
$ |
3,021 |
|
|
$ |
4,387 |
|
Movement of OSP product line |
|
|
24 |
|
|
|
(24 |
) |
|
|
— |
|
|
|
— |
|
Foreign currency translation adjustments |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(70 |
) |
|
|
(75 |
) |
Gross goodwill at December 31, 2024 |
|
|
358 |
|
|
|
1,003 |
|
|
|
2,951 |
|
|
|
4,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accumulated goodwill impairment at December 31, 2023 |
|
|
(141 |
) |
|
|
(390 |
) |
|
|
(1,302 |
) |
|
|
(1,833 |
) |
Impairment charge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accumulated goodwill impairment at December 31, 2024 |
|
|
(141 |
) |
|
|
(390 |
) |
|
|
(1,302 |
) |
|
|
(1,833 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill, net of accumulated impairment and foreign currency translation adjustments at December 31, 2024 |
|
$ |
217 |
|
|
$ |
613 |
|
|
$ |
1,649 |
|
|
$ |
2,479 |
|
As of October 31, 2025 and 2024, the Company performed its annual impairment assessment of goodwill using a qualitative assessment for all of its reporting units. The Company determined that it was more likely than not that the fair values were more than the carrying values for each of the reporting units.
Intangible Assets
The Company’s intangible assets were comprised of the following:
As of December 31, 2025 |
|
Gross |
|
|
Impairment Charges |
|
|
Accumulated Amortization |
|
|
Foreign Currency Translation |
|
|
Net |
|
|||||
Completed technology |
|
$ |
1,268 |
|
|
$ |
(152 |
) |
|
$ |
(587 |
) |
|
$ |
(3 |
) |
|
$ |
526 |
|
Customer relationships |
|
|
2,072 |
|
|
|
(1 |
) |
|
|
(622 |
) |
|
|
(5 |
) |
|
|
1,444 |
|
Patents, trademarks, trade names and other |
|
|
381 |
|
|
|
(63 |
) |
|
|
(141 |
) |
|
|
(7 |
) |
|
|
170 |
|
|
|
$ |
3,721 |
|
|
$ |
(216 |
) |
|
$ |
(1,350 |
) |
|
$ |
(15 |
) |
|
$ |
2,140 |
|
As of December 31, 2024 |
|
Gross |
|
|
Impairment Charges |
|
|
Accumulated Amortization |
|
|
Foreign Currency Translation |
|
|
Net |
|
|||||
Completed technology |
|
$ |
1,268 |
|
|
$ |
(152 |
) |
|
$ |
(496 |
) |
|
$ |
(31 |
) |
|
$ |
589 |
|
Customer relationships |
|
|
2,072 |
|
|
|
(1 |
) |
|
|
(477 |
) |
|
|
(86 |
) |
|
|
1,508 |
|
Patents, trademarks, trade names and other |
|
|
381 |
|
|
|
(63 |
) |
|
|
(130 |
) |
|
|
(13 |
) |
|
|
175 |
|
|
|
$ |
3,721 |
|
|
$ |
(216 |
) |
|
$ |
(1,103 |
) |
|
$ |
(130 |
) |
|
$ |
2,272 |
|
Aggregate amortization expense related to acquired intangible assets for 2025, 2024 and 2023 was $247, $245 and $295, respectively.
Aggregate amortization expense related to acquired intangible assets for future years is as follows:
Year |
|
Amount |
|
|
2026 |
|
$ |
248 |
|
2027 |
|
|
246 |
|
2028 |
|
|
246 |
|
2029 |
|
|
244 |
|
2030 |
|
|
238 |
|
Thereafter |
|
|
862 |
|
The Company excluded from the above table intangible assets of $56 of indefinite-lived trademarks and trade names, which were not subject to amortization.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 26, 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.