Goodwill |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the reporting units expected to benefit from the business combinations. The Company tests goodwill for impairment annually during the fourth quarter, or whenever events or changes in circumstances indicate that the fair value of net assets has decreased below its carrying value.
During the three months ended June 30, 2022, due to the sustained decline in the Company’s market capitalization and current adverse macroeconomic environment, the Company completed a quantitative impairment test for the North America and EMEA reporting units, comparing the estimated fair value of each reporting unit to its carrying value, including goodwill. As a result, the Company impaired the entire carrying value of North America goodwill of $1.3 million and EMEA goodwill of $110.4 million, which are included within Impairment of assets in the condensed consolidated statements of operations.
As part of the Company’s impairment analysis, the fair value of its reporting units were determined using both the income and market approaches. The income approach utilizes the discounted cash flow method, and the market approach utilizes the guideline company transactions method. The determination of the fair value of the Company’s reporting units requires management to make a number of estimates and assumptions, which include, but are not limited to: the projected future business and financial performance of the Company’s reporting units; forecasts of revenue, operating income, depreciation, amortization, and capital expenditures; discount rates; terminal growth rates; the selection of appropriate peer group companies; and consideration of the impact of the current adverse macroeconomic environment. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates.
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