What was the goodwill impairment for Corcoran as a total company in 2023?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
and an impairment charge for the excess is recorded. Impairment charges are recorded on a separate line in the accompanying Consolidated Statements of Operations and are non-cash in nature.
Based upon the impairment analysis performed in the fourth quarter of 2024, there was no impairment of goodwill or other indefinite-lived intangible assets for the year ended December 31, 2024. Management evaluated the effect of lowering the estimated fair value by 10% and determined that, with the exception of the Cartus reporting unit, no impairment of goodwill would have been recognized under this evaluation for 2024. The Cartus reporting unit's fair value exceeded its carrying value by approximately 9%. While the trad
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, the total goodwill impairment for the company in 2023 was $25 million. This impairment consisted of a $25 million impairment at the Cartus reporting unit and a $25 million impairment of franchise trademarks.
Goodwill, as defined in the FDD, represents the excess of acquisition costs over the fair value of net tangible and identifiable intangible assets acquired during a business combination. Goodwill and other indefinite-lived assets are not amortized but are subject to impairment testing, which means Corcoran assesses their value annually or when circumstances suggest the carrying amount may not be recoverable.
The impairment assessment is performed at the reporting unit level, including the Owned Brokerage Group, franchise services, Title Group, and Cartus. This assessment compares the carrying value of each unit and indefinite-lived intangible asset to their fair values. If the carrying value exceeds the fair value, the carrying value is reduced to fair value, and an impairment charge is recorded. These charges are non-cash and are recorded separately in the Consolidated Statements of Operations.
For a prospective franchisee, understanding goodwill impairment is crucial because it reflects the financial health and stability of Corcoran and its various segments. Significant impairments can indicate underlying issues within those segments, potentially affecting the franchisee's investment and future performance. It is important to note that while there was no impairment of goodwill or other indefinite-lived intangible assets for the year ended December 31, 2024, the Cartus reporting unit's fair value only exceeded its carrying value by approximately 9%.