Tilray Brands, Inc. Goodwill & Intangibles Disclosure
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11. |
Goodwill |
The goodwill recognized is as a result of expected synergies from combining operations through business acquisitions and none of the goodwill is deductible for income tax purposes.
Goodwill is comprised of:
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Segment |
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May 31, 2021 |
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|
May 31, 2020 |
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Broken Coast Cannabis Ltd. |
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Cannabis business |
|
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105,963 |
|
|
|
105,963 |
|
|
Nuuvera Corp. |
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Business under development |
|
|
273,606 |
|
|
|
273,606 |
|
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LATAM Holdings Inc. |
|
Business under development |
|
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63,239 |
|
|
|
63,239 |
|
|
CC Pharma GmbH |
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Distribution business |
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4,458 |
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|
|
4,458 |
|
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SweetWater |
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Beverage alcohol business |
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|
100,202 |
|
|
|
— |
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|
Tilray |
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Cannabis business |
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2,144,143 |
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|
|
— |
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|
Tilray |
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Wellness business |
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77,470 |
|
|
|
— |
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|
Effect of foreign exchange |
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|
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63,713 |
|
|
|
64 |
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|
|
|
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$ |
2,832,794 |
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$ |
447,330 |
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During the year ended May 31, 2021, the Company completed its annual goodwill impairment assessment of the fair value of the Company’s reporting units compared to their carrying amount. For the year ended May 31, 2021 there were no impairment charges recognized. For the year ended May 31, 2020, the Company recorded the following impairment charges:
$3,581 (C$4,800) on CannInvest Africa Ltd. and Verve Dynamics Incorporated (Pty) Ltd., the Company used a discount rate of 38.5%;
$3,730 (C$5,000) on ABP, S.A., the Company used a discount rate of 23.3%;
$14,301 (C$19,171) on Marigold Projects Jamaica Limited (“Marigold”), the Company used a discount rate of 38.5%; and
$29,067 (C$35,000) on ColCanna S.A.S., the Company used a discount rate of 40.0%.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Jul 28, 2021 | Showing above |
| 2020 | Feb 19, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 25, 2019 | |
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.