Intangible Assets, net
|6 Months Ended|
Jun. 30, 2022
|Goodwill and Intangible Assets Disclosure [Abstract]|
|Intangible Assets, net||
Note H – Intangible Assets, net
The intangible asset gross carrying amount and accumulated amortization were as follows:
During the second quarter of 2022, there was a significant and prolonged decline in the Company’s market capitalization driven by general economic conditions, including heightened inflation, rising interest rates and volatility in the capital markets, which indicated that recorded intangible assets may be impaired. As a result, the Company performed a quantitative impairment test of indefinite-lived intangible assets and definite-lived intangible assets in accordance with ASC 350 and ASC 360, respectively.
Under ASC 350, the fair value of the Company’s indefinite-lived intangible assets was determined using the relief from royalty method, which assumes that the asset’s fair value is the present value of license fees avoided by owning it. Under ASC 360, the Company determined that the carrying value of two asset groups within the Mission Solutions reporting unit were not recoverable based on entity-specific, undiscounted net cash flows. Accordingly, the Company determined the fair value of these two asset groups using an income approach based on a discounted cash flow model. Fair value estimates result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions that have been deemed reasonable by measurement as of the measurement date.
Impairment expense was measured as the amount by which the carrying value of the intangible assets exceeded their fair value as of June 30, 2022. Based on the results of the quantitative impairment test, the Company recognized impairment expense related to customer relationships, technology, trademarks, internal-use software licenses and IPR&D of $28.2 million during the three and six months ended June 30, 2022. Please refer to Note I for additional information related to the drivers of the decline in estimated future cash flows for the Mission Solutions reporting unit.The table below presents the future amortization expense on intangible assets as of June 30, 2022:
The entire disclosure for all or part of the information related to intangible assets.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef