Veralto CorpVLTO
Veralto Corp Goodwill & Intangibles Disclosure
GOODWILL AND OTHER INTANGIBLE ASSETS
As discussed in Note 2, goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities and noncontrolling interests. Management assesses the goodwill of each of its reporting units for impairment at least annually at the beginning of the fourth quarter and as “triggering” events occur that indicate that it is more likely than not that an impairment exists. The Company elected to bypass the optional qualitative goodwill assessment allowed by applicable accounting standards and performed a quantitative impairment test for all reporting units as this was determined to be the most effective method to assess for impairment across the reporting units.
The Company estimates the fair value of its reporting units using a market approach, based on current trading multiples of forecasted EBITDA for peer companies operating in businesses similar to each of the Company’s reporting units, in addition to recent market sale transactions of comparable companies. In determining the estimated fair value of each reporting unit, the Company also applies a control premium to the trading multiples of EBITDA for peer companies. If the estimated fair value of the reporting unit is less than its carrying value, the Company will impair the goodwill for the amount of the carrying value in excess of the fair value.
As of December 31, 2025, the Company had three reporting units for goodwill impairment testing. As of the date of the 2025 annual impairment test, the carrying value of the goodwill included in each individual reporting unit ranged from $553 million to approximately $1.3 billion. No goodwill impairment charges were recorded for the years ended December 31, 2025, 2024 and 2023 and no “triggering” events have occurred subsequent to the performance of the 2025 annual impairment test. The factors used by management in its impairment analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings.
The following is a rollforward of the Company’s goodwill by segment:
($ in millions) | Water Quality | Product Quality & Innovation | Total | ||||||||||||||
Balance, January 1, 2024 | $ | 1,305 | $ | 1,228 | $ | 2,533 | |||||||||||
Attributable to 2024 acquisitions | — | 243 | 243 | ||||||||||||||
Foreign currency translation and other | (49) | (34) | (83) | ||||||||||||||
Balance, December 31, 2024 | 1,256 | 1,437 | 2,693 | ||||||||||||||
Attributable to 2025 acquisitions | 23 | — | 23 | ||||||||||||||
Attributable to 2025 divestitures | — | (2) | (2) | ||||||||||||||
Foreign currency translation and other | 63 | 61 | 124 | ||||||||||||||
Balance, December 31, 2025 | $ | 1,342 | $ | 1,496 | $ | 2,838 | |||||||||||
Finite-lived intangible assets are amortized over their legal or estimated useful life. The following summarizes the gross carrying value and accumulated amortization for each major category of intangible assets as of December 31:
2025 | 2024 | ||||||||||||||||||||||
($ in millions) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Finite-lived intangibles: | |||||||||||||||||||||||
Customer relationships | $ | 654 | $ | (550) | $ | 631 | $ | (510) | |||||||||||||||
Patents, technology and other intangibles | 371 | (259) | 355 | (246) | |||||||||||||||||||
Total finite-lived intangibles | 1,025 | (809) | 986 | (756) | |||||||||||||||||||
Indefinite-lived intangibles: | |||||||||||||||||||||||
Trademarks and trade names | 308 | — | 305 | — | |||||||||||||||||||
Total intangibles | $ | 1,333 | $ | (809) | $ | 1,291 | $ | (756) | |||||||||||||||
During 2025 and 2024, the Company acquired finite-lived intangible assets consisting primarily of developed technology and customer relationships along with indefinite-lived trade names. Refer to Note 2 for additional information on the intangible assets acquired. There were no such acquisitions during 2023.
The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Indefinite-lived intangibles are subject to impairment testing at least annually or more frequently if events or changes in circumstances indicate that potential impairment exists. The Company identified impairment triggers during the second and third quarters of 2023 which resulted in the impairment of certain long-lived assets, including customer relationships and trade names. In 2023, the Company recorded impairment charges totaling $12 million related to these long-lived assets in selling, general and administrative expenses in the Consolidated and Combined Statements of Earnings. There were no impairment charges recorded during 2025 or 2024.
Total intangible amortization expense in 2025, 2024 and 2023 was $36 million, $38 million and $48 million, respectively. Based on the intangible assets recorded as of December 31, 2025, amortization expense is estimated to be approximately $35 million during 2026, $32 million during 2027, $30 million during 2028, $28 million during 2029 and $25 million during 2030.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 28, 2024 | |
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.