|9 Months Ended|
Sep. 30, 2023
|Goodwill and Intangible Assets Disclosure [Abstract]|
NOTE 8. GOODWILL
We account for goodwill in accordance with FASB ASC Topic 350
. We do not amortize goodwill, but rather test for impairment annually or more frequently if events or circumstances indicate that an asset may be impaired. We perform our annual impairment testing during the fourth quarter of each year, which coincides with our budget and planning process for the upcoming year.
Intangibles—Goodwill and Other
As a result of changes in macroeconomic conditions and revenue forecasts, we performed an interim review of goodwill for impairment at June 30, 2023 and September 30, 2023. We assessed a variety of factors, including forecasts for the remainder of 2023 and the amount by which the prior estimated fair value exceeded the carrying value including goodwill.
Based on our qualitative review, we tested one digital media entity for goodwill impairment at June 30, 2023 and two digital media entities and two publishing entities goodwill at September 30, 2023. We engaged Bond & Pecaro, an independent appraisal and valuation firm, to assist us in estimating the enterprise value of Salem Web Network, Townhall.com
®Publishing and Salem Author Services to test goodwill for impairment. The enterprise valuation assumes that the subject assets are installed as part of an operating business rather than as a hypothetical
The following table presents the changes in goodwill including business acquisitions and dispositions as discussed in Note 3 of our Condensed Consolidated Financial Statements.
The key estimates and assumptions used for our enterprise valuations were as follows:
The risk-adjusted discount rate reflects the WACC developed based on data from same or similar industry participants and publicly available market data as of the measurement date.
Based on our review and analysis, we recorded an impairment charge of $0.7
million to the carrying value of goodwill associated with Townhall.com
®and Salem Author Services at September 30, 2023 and a $1.8 million impairment charge to the carrying value of goodwill associated with Townhall.com
®at June 30, 2023. The impairment charge was driven by an increase in the WACC and the decreased revenue growth rates within the industry over those used in the
year-endvaluation forecasts and increases. We believe that this decrease is indicative of trends in the industry as a whole and not unique to our company or operations.
The entire disclosure for goodwill.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef