RideNow Group, Inc.RDNW

RideNow Group, Inc. Fair Value Disclosure

10-KFiled Mar 28, 20241 min read
FAIR VALUE MEASUREMENTS
Fair Value of Measurements Using Level 3 Inputs on a Non-recurring Basis
In connection with the Company’s 2023 annual goodwill and indefinite-lived intangible assets impairment assessment, the Company recognized non-cash impairment charges of $23.1 million and $37.0 million to reduce the carrying values of goodwill and franchise rights, respectively, to their fair values, in the Powersports reporting unit.
In 2022, the Company recognized non-cash impairment charges of $218.6 million and $105.7 million to reduce the carrying value of the goodwill and franchise rights, respectively, to their fair values, in the Powersports reporting unit and $26.0 million to write off the goodwill in the now discontinued automotive business.
In addition, assets acquired and liabilities assumed in business combinations were recorded at their fair values as of the acquisition date.
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About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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