TransUnionTRU
TransUnion Goodwill & Intangibles Disclosure
Goodwill
Goodwill is allocated to our reporting units, which are an operating segment or one level below an operating segment. Our reporting units consist of U.S. Markets, Consumer Interactive, and the geographic regions of the United Kingdom, Africa, Canada, Latin America, India and Asia Pacific within our International reportable segment. We test goodwill for impairment on an annual basis in the fourth quarter and monitor throughout the year for impairment triggering events that indicate that the carrying value of one or more of our reporting units exceeds its fair value.
Our quantitative impairment test consists of a fair value calculation for each reporting unit that combines an income approach, using the discounted cash flow method, and a market approach, using the guideline public company method. The quantitative impairment test requires the application of a number of significant assumptions, including estimates of future revenue growth rates, EBITDA margins, discount rates, and market multiples. The projected future revenue growth rates and EBITDA margins, and the resulting projected cash flows of each reporting unit are based on historical experience and internal operating plans reviewed by management, extrapolated over the forecast period. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to each reporting unit. Market multiples are based on the Guideline Public Company Method using comparable publicly traded company multiples of EBITDA for a group of benchmark companies.
Third Quarter Interim Impairment Test for our United Kingdom Reporting Unit
During the three months ended September 30, 2023, we identified a triggering event requiring an interim impairment assessment for our United Kingdom reporting unit, which resulted in a goodwill impairment of $414.0 million. The worsening macroeconomic conditions during the third quarter from inflationary pressures and rising interest rates increasingly impacted our United Kingdom business for the third quarter and the near-term outlook. Due to these factors, management believes the U.K. recovery will take longer, and will be at a slower pace, than previously expected. As a result, we revised our short-term and mid-term forecasts for revenue and EBITDA expectations for our United Kingdom reporting unit. These factors particularly impacted the online-only FinTech lenders that represent the largest vertical within our United Kingdom reporting unit. These lenders experienced declines in their access to capital impacting their ability to lend and in some cases leading to bankruptcies.
Annual Impairment Test
For our 2023 annual impairment test, we elected to bypass the qualitative goodwill impairment analysis similar to 2022 and 2021, and instead performed a quantitative goodwill impairment test for all reporting units. For each of our reporting units, the fair value exceeded the carrying value and no impairment was recorded. For our United Kingdom reporting unit, the fair value approximates the carrying value as a result of the impairment recorded in the three months ended September 30, 2023. Our annual impairment test for the United Kingdom reporting unit indicated no further impairment was required. As of December 31, 2023, we had $288.8 million of goodwill for our United Kingdom reporting unit, and an accumulated goodwill impairment of $414.0 million.
We believe the assumptions that we used in our interim and annual impairment assessments for our United Kingdom reporting unit are reasonable and consistent with assumptions that would be used by other marketplace participants. However, such assumptions are inherently uncertain, and a change in assumptions could change the estimated fair value of our United Kingdom reporting unit. Therefore, future impairments of our United Kingdom reporting unit could be required, which could be material to the consolidated financial statements.
Additionally, we did not identify any triggering events in the fourth quarter subsequent to our annual test that would require an interim impairment test for any of the reporting units.
There were no impairment charges recorded in 2022 or 2021.
Goodwill allocated to our reportable segments as of December 31, 2023 and 2022, and the changes in the carrying amount of goodwill during the periods, consisted of the following:
| U.S. Markets | International | Consumer Interactive | Total | ||||||||||||||||||||
| Balance, December 31, 2021 | $ | 3,454.6 | $ | 1,384.1 | $ | 687.0 | $ | 5,525.7 | |||||||||||||||
Acquisitions | 167.5 | — | — | 167.5 | |||||||||||||||||||
| Purchase accounting measurement period adjustments | (18.1) | — | (7.9) | (26.0) | |||||||||||||||||||
| Foreign exchange rate adjustment | (1.3) | (114.5) | — | (115.8) | |||||||||||||||||||
| Balance, December 31, 2022 | $ | 3,602.7 | $ | 1,269.6 | $ | 679.1 | $ | 5,551.4 | |||||||||||||||
| Purchase accounting measurement period adjustments | (0.5) | — | — | (0.5) | |||||||||||||||||||
| Foreign exchange rate adjustment | 0.5 | 38.5 | — | 39.0 | |||||||||||||||||||
Impairment | — | (414.0) | — | (414.0) | |||||||||||||||||||
| Balance, December 31, 2023 | $ | 3,602.8 | $ | 894.1 | $ | 679.1 | $ | 5,176.0 | |||||||||||||||
The gross and net goodwill balances at each period were as follows:
| December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Gross Goodwill | Accumulated Impairment | Net Goodwill | Gross Goodwill | Accumulated Impairment | Net Goodwill | ||||||||||||||||||||||||||||||
U.S Markets | $ | 3,602.8 | $ | — | $ | 3,602.8 | $ | 3,602.7 | $ | — | $ | 3,602.7 | |||||||||||||||||||||||
International | 1,308.1 | (414.0) | 894.1 | 1,269.6 | — | 1,269.6 | |||||||||||||||||||||||||||||
Consumer Interactive | 679.1 | — | 679.1 | 679.1 | — | 679.1 | |||||||||||||||||||||||||||||
Total | $ | 5,590.0 | $ | (414.0) | $ | 5,176.0 | $ | 5,551.4 | $ | — | $ | 5,551.4 | |||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Feb 28, 2024 | Showing above |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 13, 2018 | |
| 2016 | Feb 15, 2017 | |
| 2015 | Feb 19, 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.