How does Bumble Roofing test goodwill for impairment?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
Goodwill is not amortized, but is tested for impairment using a fair value approach. If the fair value of the reporting unit is less than its carrying value, or if the fair value of the goodwill has been diminished, an impairment loss would be recorded to the extent of that difference. The Company tests for impairment as of September 30 annually. Goodwill will be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value or diminish the fair value of the goodwill. Management believes there has been no impairment of intangible assets during 2024, 2023, or 2022.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, goodwill is not amortized but is tested for impairment using a fair value approach. If the fair value of the reporting unit is less than its carrying value, or if the fair value of the goodwill has been diminished, an impairment loss would be recorded to the extent of that difference. Bumble Roofing tests for impairment as of September 30 annually.
Bumble Roofing will also test for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value or diminish the fair value of the goodwill.
The document states that management believes there has been no impairment of intangible assets during 2024, 2023, or 2022. This means that, as of the FDD's publication, Bumble Roofing's management had not identified any events or changes in circumstances that would suggest the value of its intangible assets, including goodwill, had declined.