Assurant 2014 Annual Report Download - page 123

ASSURANT, INC. – 2014 Form 10-K F-35
11 Goodwill
11. Goodwill
The Company has assigned goodwill to its operating segments for impairment testing purposes. The Corporate and Other
segment is not assigned goodwill. Below is a roll forward of goodwill by reportable segment.
Solutions(1)
Specialty
Property Health
Employee
Benefi ts Consolidated
Balance at December 31, 2012
Goodwill $ 1,642,201 259,452 204,303 185,078 2,291,034
Accumulated impairment losses (1,260,939) — (204,303) (185,078) (1,650,320)
381,262 259,452 — — 640,714
Acquisitions 113,646 28,908 — — 142,554
Foreign currency translation and other 1,293 — — — 1,293
Balance at December 31, 2013
Goodwill 1,757,140 288,360 204,303 185,078 2,434,881
Accumulated impairment losses (1,260,939) — (204,303) (185,078) (1,650,320)
496,201 288,360 — — 784,561
Acquisitions 51,574 28,677 — — 80,251
Dispositions — (15,451) — — (15,451)
Foreign currency translation and other (8,122) — — — (8,122)
Balance at December 31, 2014
Goodwill 1,800,592 301,586 204,303 185,078 2,491,559
Accumulated impairment losses (1,260,939) — (204,303) (185,078) (1,650,320)
$ 539,653 $ 301,586 $ — $ — $ 841,239
(1) The accumulated impairment loss relates to an acquisition made in 1999. The entity acquired had businesses that currently are primarily
represented by the Assurant Solutions and Assurant Specialty Property segments. Prior to 2006, the Assurant Solutions and Assurant Specialty
Property segments were combined and together called Assurant Solutions. Thus, the entire goodwill impairment recognized in 2002 due to the
adoption of FAS 142 is included in the tables under the Assurant Solutions segment.
In accordance with the goodwill guidance, goodwill is deemed
to have an indefi nite life and should not be amortized, but
rather must be tested, at least annually, for impairment. In
addition, goodwill should be tested for impairment between
annual tests if an event occurs or circumstances change that
would “more likely than not” reduce the estimated fair value
of the reporting unit below its carrying value.
The goodwill impairment test has two steps. Step 1 of the
test identifi es potential impairments at the reporting unit
level, which for the Company is the same as our operating
segments, by comparing the estimated fair value of each
reporting unit to its net book value. If the estimated fair
value of a reporting unit exceeds its net book value, there
is no impairment of goodwill and Step 2 is unnecessary.
However, if the net book value exceeds the estimated fair
value, then Step 1 is failed, and Step 2 is performed to
determine the amount of the potential impairment. Step
2 utilizes acquisition accounting guidance and requires the
fair value calculation of all individual assets and liabilities
of the reporting unit (excluding goodwill, but including any
unrecognized intangible assets). The net fair value of assets
less liabilities is then compared to the reporting unit’s total
estimated fair value as calculated in Step 1. The excess of
fair value over the net asset value equals the implied fair
value of goodwill. The implied fair value of goodwill is then
compared to the carrying value of goodwill to determine
the reporting unit’s goodwill impairment. Alternatively, the
amended intangibles- goodwill and other guidance provides
the option to fi rst assess qualitative factors to determine
whether the existence of events or circumstances leads to
a determination that it is more likely than not that the fair
value of a reporting unit is less than its carrying amount. If,
after assessing the totality of events or circumstances, an
entity determines it is not more likely than not that the fair
value of a reporting unit is less than its carrying amount,
then performing the two-step impairment test is unnecessary.
However, if an entity concludes otherwise, then it is required
to perform the fi rst step of the two-step impairment test,
described above.
In the fourth quarters of 2014, 2013 and 2012, the Company
conducted its annual assessments of goodwill. During the
year ended December 31, 2014, the Company changed its
annual testing date from November 30 to October 1. With
respect to its annual goodwill testing date, management
believes that this voluntary change in accounting method is
preferable as it better aligns the annual impairment testing
date with the Company’s strategic planning cycle, which is
a signifi cant element in the testing process. This change in
annual testing date does not delay, accelerate or avoid an
impairment charge.