Rigetti Computing, Inc. Goodwill & Intangibles Disclosure
(8) Goodwill
The following table sets forth the change in goodwill for the year ended December 31, 2022 (in thousands):
Balance as of December 31, 2021 |
| $ | 5,377 |
Goodwill acquired |
| — | |
Impairment charge | (5,377) | ||
Balance as of December 31, 2022 | $ | — |
During the year ended December 31, 2022, the Company conducted its annual goodwill impairment testing using qualitative and qualitative factors that indicated a possible impairment of goodwill. Under the qualitative assessment, management considered relevant events and circumstances including but not limited to macroeconomic conditions, industry and market considerations, Company performance and events directly affecting the Company. It was noted that the Company experienced a sustained decline in stock price resulting in a triggering event for goodwill impairment. As a result, further quantitative analysis was conducted to determine the extent to which the Company’s carrying value exceeded its fair value as of December 31, 2022. Fair value for the quantitative analysis was based on the Company’s market capitalization adjusted for a control premium determined from market comparable transactions. Based on the quantitative analysis, it was determined that the Company’s fair value was significantly less than its carrying value, resulting in a non-cash goodwill impairment charge of $5.4 million for the year ended December 31, 2022.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 14, 2024 | Showing above |
| 2022 | Mar 27, 2023 | |
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.