Friday, April 29, 2016

Earlier this week we did a quick analysis of goodwill impairment among the S&P 500 in 2015, and picked on Yahoo for having the most notable impairment of the year. We thought that might have been a bit unkind, so we did a second analysis of goodwill impairment, this time looking at all corporate filers going back to 2011.

That picture isn’t terribly pretty either.

Goodwill impairment spiked in 2014, and then rose even further in 2015—when we still have a considerable number of corporate filers who haven’t submitted 2015 results yet. Impairment is close to a five-year high…

  • in total dollars: $83 billion in impairments reported so far for 2015;
  • as a percentage of total goodwill assets: 2.44 percent;
  • in average size of impairment per company disclosing one: $205.5 million;
  • and as a percentage of companies disclosing impairment: 7.19 percent.

What’s more, those numbers all hold true even though our population of 2015 filers is still incomplete; it’s 30 percent smaller than the average for the previous four years. By the time all 2015 filers submit all their data, the numbers above could be even worse.

Here is the complete analysis for 2011 through 2015.

Year No. of Filers Total Goodwill Total Impairment Impairment as % of Goodwill Total Cos. Impairing Avg. Impairment per Co. % Reporting Impairment
2011 8516 $3.060 trill $67.233 bill 2.20 pct 475 $141.5 mill 5.58 pct
2012* 8192 $3.243 trill $71.859 bill 2.22 pct 481 $149.4 mill 5.88pct
2013 7893 $3.351 trill $34.664 bill 1.03 pct 384 $90.27 mill 4.87 pct
2014 7334 $3.561 trill $48.65 bill 1.37 pct 409 $118.9 mill 5.58 pct
2015 5617 $3.408 trill $83.02 bill 2.44 pct 404 $205.49 mill 7.19 pct

*2012 excludes General Motors, which reported an outlier impairment of $27.14 billion. Including that number, total impairments for the year would be $99.0 billion, impairment as a percentage of goodwill would be 3.05 percent, and average impairment per company would be $205.4 million.

**2014 excludes Verizon subsidiary AOL, which reported an outlier impairment of $35.6 billion. Including that number, total impairments for the year would be $84.275 billion, impairment as a percentage of goodwill would be 2.37 percent, and average impairment per company would be $205.5 million.

Remember, you can explore more goodwill impairments yourself on our Normalized Data or Company in Detail pages. Be sure to read our Guide to Analyzing Goodwill and try our Goodwill & Intangibles Excel Template, too.

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