GE 2014 Annual Report Download - page 186

166 GE 2014 FORM 10-K
FINANCIAL STATEMENTS ACQUISITIONS & INTANGIBLE ASSETS
During the third quarter of 2014, we performed our annual impairment test of goodwill for all of our reporting units. Based on
the results of our step one testing, the fair values of each of the GE reporting units exceeded their carrying values; therefore,
the second step of the impairment test was not required to be performed for any of our reporting units and no goodwill
impairment was recognized.
While all of our reporting units passed step one of our annual impairment testing, we identified one reporting unit for which the
fair value was not substantially in excess of its carrying value. Within our Energy Management operating segment, the Power
Conversion reporting unit was determined to have a fair value in excess of its carrying value by approximately 10%. The
goodwill associated with the Power Conversion reporting unit was $1.5 billion at December 31, 2014, representing
approximately 2% of our total goodwill. While the goodwill of the reporting unit is not currently impaired, there could be an
impairment in the future as a result of changes in certain estimates and assumptions. For example, the reporting unit’s fair
value could be adversely affected and result in an impairment of goodwill if actual cash flows are below estimated cash flows,
the estimated cash flows are discounted at a higher risk-adjusted rate or market multiples decrease.
As of December 31, 2014, we believe that the goodwill is recoverable for all of the reporting units; however, there can be no
assurances that the goodwill will not be impaired in future periods.
In 2013, while the Real Estate reporting unit’s book value was within the range of its fair value, we further substantiated our
Real Estate goodwill balance by performing the second step analysis in which the implied fair value of goodwill exceeded its
carrying value by approximately $3.7 billion. In the current year, it was determined that the second step was not required, as
the results of step one indicated that the fair value of the Real Estate reporting unit exceeded its book value.
Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number
of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could
change in future periods.
OTHER INTANGIBLE ASSETS
OTHER INTANGIBLE ASSETS - NET
(In millions) 2014 2013
Intangible assets subject to amortization $ 14,026 $ 14,150
Indefinite-lived intangible assets(a) 130 160
Total $ 14,156 $ 14,310
(a) Indefinite-lived intangible assets principally comprise trademarks and in-process research and development.