What was the goodwill impairment amount for Corcoran in 2022?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Federal statutory rate | 21 % | 21 % | 21 % |
| State and local income taxes, net of federal tax benefits | 5 | 1 | 3 |
| Non-deductible equity compensation | (1) | (1) | — |
| Non-deductible executive compensation | (4) | (4) | (1) |
| Goodwill impairment | — | (5) | (8) |
| Uncertain tax positions | — | — | (1) |
| Tax credits (a) | 5 | 6 | 7 |
| Net change in valuation allowance (b) | (21) | (5) | — |
| Other permanent differences | (3) | — | (2) |
| Effective tax rate | 2 % | 13 % | 19 % |
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, the goodwill impairment for 2022 was an (8) percentage. This figure is part of a table that outlines the factors contributing to the company's effective tax rate for the years 2022, 2023, and 2024. Goodwill impairment represents a reduction in the carrying value of goodwill on a company's balance sheet, typically due to factors like declining market conditions or poor performance of an acquired entity.
In 2022, Corcoran recognized impairments of goodwill at the Owned Brokerage Group reporting unit of $280 million, at the Franchise Group segment of $114 million related to the Cartus reporting unit, and an impairment of franchise trademarks of $76 million. These impairments were primarily due to a decline in transaction volume resulting from rapidly rising mortgage rates, high inflation, reduced affordability, and broader macroeconomic concerns. These market conditions led to lower homesale transaction volume for the brokerage and franchise business, as well as lower referral volume for the lead generation business.
For a prospective franchisee, goodwill impairment can signal potential risks or challenges within specific segments of Corcoran's business. While the (8) percentage listed in the table provides a high-level overview, the additional details regarding the specific impairment amounts and the underlying reasons offer a more comprehensive understanding. It is important to note that these impairments are non-cash charges, meaning they do not directly impact the company's cash flow but do affect its reported earnings. A potential franchisee should investigate the stability and performance of the specific reporting units they are considering joining, as well as Corcoran's strategies for addressing market challenges and maintaining the value of its brand and assets.