Assurant 2015 Annual Report Download - page 123

ASSURANT, INC. – 2015 Form 10-K F-37
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
Benets Consolidated
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
Acquisitions 2,520 5,365 — — 7,885
Dispositions —(2,532) — — (2,532)
Foreign currency translation and other (13,080) — — — (13,080)
Balance at December 31, 2015
Goodwill 1,790,032 304,419 204,303 185,078 2,483,832
Accumulated impairment losses (1,260,939) — (204,303)(185,078)(1,650,320)
$ 529,093 $ 304,419 $ — $ — $ 833,512
(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 inde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
identi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 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 rst step of the two-step impairment test,
described above�
In the fourth quarters of 2015, 2014 and 2013, 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 signicant element in the testing process. This change in
annual testing date did not delay, accelerate or avoid an
impairment charge�
In 2015 for both Assurant Solutions and Assurant Specialty
Property reporting units and in 2013 for the Assurant Specialty
Property reporting unit, the Company chose the option
to perform a qualitative assessment under the amended
intangibles—goodwill and other guidance� The Company
performed a Step 1 test for the Assurant Solutions reporting
unit in 2014 and 2013 and for the Assurant Specialty Property
reporting unit in 2014. Based on these tests, it was determined
that goodwill was not impaired at either reporting unit�