Vertex, Inc. Goodwill & Intangibles Disclosure
8.GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and other intangible assets were as follows:
As of December 31, | ||||||
2021 | 2020 | |||||
Goodwill | $ | 270,041 | $ | 16,329 | ||
Other intangible assets, net | 2,661 |
| 2,382 | |||
Total | $ | 272,702 | $ | 18,711 | ||
The changes in the carrying amount of goodwill are as follows:
As of December 31, | ||||||
2021 | 2020 | |||||
Balance, January 1 | $ | 16,329 | $ | — | ||
Acquisitions | 265,867 |
| 21,089 | |||
Foreign currency translation adjustments | (12,155) | (4,760) | ||||
Balance, December 31, gross | 270,041 | 16,329 | ||||
Accumulated impairment losses | — | — | ||||
Balance, December 31, net | $ | 270,041 | $ | 16,329 | ||
The Company recognized various amortizable other intangible assets in connection with acquisitions (Note 3), including related to customer relationships, technology and tradenames. The following tables provide additional information for our other intangible assets, which are individually not material to the consolidated financial statements:
As of December 31 | |||||||||
2021 | 2020 | ||||||||
Weighted average amortization period (years) | 4.2 | 5.5 | |||||||
Gross value | $ | 4,110 | $ | 2,825 | |||||
Accumulated amortization | (1,449) | (443) | |||||||
Carrying value | $ | 2,661 | $ | 2,382 | |||||
The following table presents amortization of intangible assets:
Year Ending December 31, | Cost of Revenues, Software Subscriptions | Selling and | Total Expense | ||||||
2021 | $ | 253 |
| $ | 813 |
| $ | 1,066 | |
2020 | $ | 267 |
| $ | 176 |
| $ | 443 | |
The following table presents estimated future amortization of intangible assets:
Year Ending December 31, |
|
| |
2022 | $ | 1,203 | |
2023 |
| 743 | |
2024 |
| 466 | |
2025 |
| 249 | |
Total | $ | 2,661 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Mar 16, 2022 | Showing above |
| 2020 | Mar 15, 2021 | |
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.