Western Union 2015 Annual Report Download - page 186

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We could be required to evaluate the recoverability of goodwill if we experience disruptions to the business, unexpected
significant declines in operating results, a divestiture of a significant component of our business, or other triggering events. In
addition, as our business or the way we manage our business changes, our reporting units may also change. If an event described
above occurs and causes us to recognize a goodwill impairment charge, it would impact our reported earnings in the period such
charge occurs.
The carrying value of goodwill as of December 31, 2015 was $3,163.8 million which represented approximately 33% of our
consolidated assets. As of December 31, 2015, goodwill of $1,950.1 million and $996.0 million resides in our Consumer-to-
Consumer and Business Solutions reporting units, respectively. The remaining $217.7 million resides in multiple reporting units
which are included in either our Consumer-to-Business segment or Other. For the reporting units that comprise Consumer-to-
Consumer, Consumer-to-Business, and Other, the fair value of the businesses greatly exceed their carrying amounts.
The fair value of the Business Solutions reporting unit has not significantly exceeded its carrying value in prior years and is
sensitive to changes in projections for revenue growth rates and EBITDA margins. However, in the current year, the estimated fair
value of the Business Solutions reporting unit increased significantly compared to the prior year. This increase was primarily due
to the inclusion of the value derived from recently implemented strategies to optimize cash flow management and global liquidity
by furthering our overall ability to utilize international cash balances, including balances generated by our other operating segments,
to initially fund global principal payouts for Business Solutions transactions initiated in the United States. The positive impact of
these strategies, which would also be available to certain hypothetical market participants, was partially offset by the projected
impact of the pending termination of a partner relationship contract.
We did not record any goodwill impairments during the three years ended December 31, 2015.
Legal Contingencies
We are subject to certain claims and litigation that could result in losses, including damages, fines and/or civil penalties, which
could be significant, and in some cases, criminal charges. We regularly evaluate the status of legal matters to assess whether a loss
is probable and reasonably estimable in determining whether an accrual is appropriate. If the potential loss from any claim or legal
proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. When
a potential loss is considered probable and the reasonable estimate is a range, we accrue on the low end of the range when no
amount is a better estimate than any other amount.
Significant judgment is required in determining whether a loss is probable and whether the loss can be reasonably estimated,
including determining a loss value within a range. Our judgments are subjective and are based on considerations such as the status
of the legal or regulatory proceedings, the merits of our defenses and consultations with in-house and outside legal counsel. As
the outcome of claims and litigation is uncertain, accruals are based on the best information available at the time the judgment is
made. As additional information becomes available, which may include information we learn through the discovery process,
settlement discussions, or rulings by courts, arbitrators or others, we reassess the potential liability related to pending claims and
litigation and may revise our estimates.
In determining whether disclosure is appropriate, we evaluate each legal matter to assess if there is at least a reasonable
possibility that a material loss or additional material loss may have been incurred beyond those amounts which we have already
accrued. If such a reasonable possibility exists, we disclose an estimate of possible loss or range of loss or if such an estimate of
possible loss or range of loss cannot be made.
Due to the inherent uncertainties of the legal and regulatory process in the multiple jurisdictions in which we operate and to
the varied range of potential outcomes, the actual outcomes may differ materially from our judgments.
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