RTB Digital, Inc. Goodwill & Intangibles Disclosure
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7. |
GOODWILL |
The Company performs its goodwill impairment test annually and evaluates goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. The Company performs the annual impairment testing of goodwill using October 1 as the measurement date. As all of the balance of goodwill was added in the year ended December 31, 2021, the Company has not yet performed its initial goodwill impairment test.
The Company anticipates that the majority of total goodwill recognized will be fully deductible for tax purposes as of December 31, 2021.
As of December 31, 2021 goodwill consisted of the following:
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As of December 31, 2021 |
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Acquisition of Northeast |
$ | 2,293,474 | ||
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Acquisition of ChargeSavvy |
3,754,560 | |||
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Total goodwill |
$ | 6,048,034 | ||
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.