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This excerpt taken from the CLX DEF 14A filed Oct 3, 2008. Goodwill and Other Intangible
Assets. With respect to goodwill, impairment
occurs when the carrying amount of a reporting unit’s goodwill exceeds its
implied fair value. An impairment charge is recorded for the difference between
the carrying amount and the implied fair value of the reporting unit’s goodwill.
For trademarks and other intangible assets with indefinite lives, impairment
occurs when the carrying amount of an asset is greater than its fair value. A
charge is recorded for the difference between the carrying amount and the
estimated fair value. The Company’s estimates of fair value are based primarily
on a discounted cash flow approach that requires significant management judgment
with respect to future volumes, revenue and expense growth rates, changes in
working capital use, foreign-exchange rates, devaluation, inflation and the
selection of an appropriate discount rate. The Company tests its goodwill,
trademarks with indefinite lives and other indefinite-lived intangible assets
annually in the third fiscal quarter unless there are indications during an
interim period that these assets may have become impaired.
This excerpt taken from the CLX DEF 14A filed Oct 4, 2006. Goodwill and Other Intangible Assets. The Company’s impairment review is based on a discounted cash flow approach that requires significant management judgment with respect to future volume, revenue and expense growth rates, changes in working capital use, foreign-exchange rates,
A-16 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND devaluation, inflation and the selection of an appropriate discount rate. Impairment occurs when the carrying value of a reporting unit exceeds the fair value of that reporting unit. An impairment charge is recorded for the difference between the carrying value and the fair value of the reporting unit, which is determined based on the net present value of estimated future cash flows. The Company tests its intangible assets annually in the third fiscal quarter unless there are indications during an interim period that assets may have become impaired. The Company uses its judgment in assessing whether assets may have become impaired between annual valuations. Indicators such as unexpected adverse economic factors, unanticipated technological changes or competitive activities, loss of key personnel and acts by governments and courts may signal that an asset has become impaired. The Company performed its annual review of intangible assets in the third quarter of fiscal year 2006 and determined that there were no instances of impairment. Business valuations of the Colombia and Venezuela reporting units were performed, as these businesses operate under continuing economic and political uncertainties. The fair value for Colombia was only slightly in excess of the carrying amount. A 10% decrease in estimated cash flows of the Columbia business valuation would not have lowered the fair value of the business below the carrying amount. The Company is closely monitoring any events, circumstances or changes in the businesses that might imply a reduction in the fair value and might lead to an impairment. Property, plant and equipment and definite-lived intangible assets are reviewed periodically for possible impairment in accordance with SFAS No. 144, | EXCERPTS ON THIS PAGE:
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