Juno 2013 Annual Report Download - page 105

Table of Contents
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


—Goodwill represents the excess of the purchase price of an acquired entity over the fair value of the net tangible and intangible assets
acquired. The Company accounts for goodwill in accordance with ASC 350, , which among other things, addresses
financial accounting and reporting requirements for acquired goodwill. ASC 350 prohibits the amortization of goodwill and requires the Company to
test goodwill at the reporting unit level for impairment at least annually.
The Company tests the goodwill of its reporting units for impairment annually during the fourth quarter of its fiscal year and whenever events
occur or circumstances change that would more likely than not indicate that the goodwill might be impaired. Events or circumstances which could
trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or
assessment by a regulator, unanticipated competition, a loss of key management or other personnel, significant changes in the manner of the Company's
use of the acquired assets or the strategy for the acquired business or the Company's overall business, significant negative industry or economic trends,
or significant underperformance relative to expected historical or projected future results of operations.
Testing goodwill for impairment involves a two-step quantitative process. However, prior to performing the two-step quantitative goodwill
impairment test, the Company has the option to first assess qualitative factors to determine whether or not it is necessary to perform the two-step
quantitative goodwill impairment test for selected reporting units. If the Company chooses the qualitative option, the Company is not required to
perform the two-step quantitative goodwill impairment test unless it has determined, based on the qualitative assessment, that it is more likely than not
that the fair value of a reporting unit is less than its carrying amount. If the two-step quantitative impairment test is required or chosen, the first step of
the impairment test involves comparing the estimated fair value of a reporting unit with its carrying amount, including goodwill. If the estimated fair
value of a reporting unit exceeds its carrying amount, including goodwill, goodwill is considered not to be impaired and no additional steps are
necessary. If, however, the estimated fair value of a reporting unit is less than its carrying amount, including goodwill, then the carrying amount of the
goodwill is compared with its implied fair value, which is determined by deducting the aggregate fair value of the reporting unit's identifiable assets and
liabilities from the fair value of the reporting unit, and an impairment loss is recognized in an amount equal to the excess.
The process of estimating the fair value of goodwill is subjective and requires the Company to make estimates that may significantly impact the
outcome of the analyses. The estimated fair value for each reporting unit is determined using a combination of the income approach and the market
approach. The income approach is weighted at 75%, unless a meaningful base of market data is unavailable, in which case, the market approach is not
used. Under the income approach, each reporting unit's fair value is estimated based on the discounted cash flow method. The discounted cash flow
method is dependent upon a number of factors, including projections of the amounts and timing of future revenues and cash flows, assumed discount
rates and other assumptions. Under the market approach, using the guideline company method, each reporting unit's fair value was estimated by
multiplying the reporting unit's assessed sustainable level of revenues and normalized earnings before interest, taxes, depreciation, and amortization
("EBITDA") by selected revenue and EBITDA multiples based on market statistics of identified public companies comparable to the respective
reporting unit.
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