This excerpt taken from the GWW 10-K filed Feb 28, 2005.
NOTE 3CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other Intangible Assets and the transition provisions of SFAS No. 141, Business Combinations. As a result of the application of the new impairment methodology introduced by SFAS No. 142, the Company completed its initial process of evaluating goodwill for impairment and recorded a noncash charge to earnings in 2002 of $32.3 million ($23.9 million after-tax, or $0.26 per diluted share) related to the write-down of goodwill of its Canadian subsidiary, Acklands Grainger Inc. (Acklands). In performing the initial and periodic impairment reviews, the fair value of the reporting units acquired were estimated using a present value method that discounted future cash flows. When available and as appropriate, comparative market multiples were used to corroborate the results of the discounted cash flows. The Company performs its annual evaluation of goodwill and indefinite lived intangible assets for impairment in the fourth quarter of each year and no further write-downs have been required after the initial write-down noted above.
Previous accounting rules incorporated a comparison of book value to undiscounted cash flows, whereas the new rules require a comparison of book value to discounted cash flows, which are lower. There were no material adjustments relating to the classification of the Companys intangible assets or amortization periods as a result of adopting SFAS No. 142.