Tecnoglass Inc. Goodwill & Intangibles Disclosure
| Note 11. | Goodwill and Intangible Assets |
Goodwill
There were no movements to goodwill during the year ended December 31, 2019 and 2020.
Intangible Assets, Net
Intangible assets include Miami-Dade County Notices of Acceptances (NOA’s), which are certificates issued for approved products and required to market hurricane- resistant glass in Florida. Also, it includes the intangibles acquired from the acquisition of GM&P.
| December 31, 2020 | ||||||||||||
| Gross | Acc. Amort. | Net | ||||||||||
| Trade Names | $ | 980 | $ | (751 | ) | $ | 229 | |||||
| Notice of Acceptances (NOAs), product designs and other intellectual property | 9,236 | (5,255 | ) | 3,981 | ||||||||
| Non-compete Agreement | 165 | (126 | ) | 39 | ||||||||
| Customer Relationships | 4,140 | (3,277 | ) | 863 | ||||||||
| Total | $ | 14,521 | $ | (9,409 | ) | $ | 5,112 | |||||
| December 31, 2019 | ||||||||||||
| Gross | Acc. Amort. | Net | ||||||||||
| Trade Names | $ | 980 | $ | (555 | ) | $ | 425 | |||||
| Notice of Acceptances (NOAs), product designs and other intellectual property | 8,903 | (4,323 | ) | 4,580 | ||||||||
| Non-compete Agreement | 165 | (94 | ) | 71 | ||||||||
| Contract Backlog | 3,090 | (3,090 | ) | - | ||||||||
| Customer Relationships | 4,140 | (2,513 | ) | 1,627 | ||||||||
| Total | $ | 17,278 | $ | (10,575 | ) | $ | 6,703 | |||||
The weighted average amortization period is 5.4 years.
During the twelve months ended December 31, 2020 and 2019, the amortization expense amounted to $2,178 and $2,732, respectively, and was included within the general and administration expenses in our consolidated statement of operations.
The estimated aggregate amortization expense for each of the five succeeding years as of December 31, 2020 is as follows:
| Year ending | (in thousands) | |||
| 2021 | $ | 2,185 | ||
| 2022 | 1,173 | |||
| 2023 | 851 | |||
| 2024 | 522 | |||
| 2025 | 212 | |||
| Thereafter | 169 | |||
| $ | 5,112 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2020 | Mar 8, 2021 | Showing above |
| 2019 | Mar 6, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | May 31, 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.