RECENT POSTS
Saturday, April 13, 2019
When AWS Takes Over the World

Thursday, April 11, 2019
Data Trends in Focus: Restructuring Costs

Sunday, April 7, 2019
How One Customer Crushed It With Calcbench

Thursday, April 4, 2019
TJX Shows Complexity of Leasing Costs Reporting

Tuesday, April 2, 2019
CEO Pay Ratios: Some 2018 Thoughts

Wednesday, March 27, 2019
Corporate Spending: Where It Goes, 2017 vs. 2018

Monday, March 25, 2019
Health Insurers: A Bit Winded?

Friday, March 22, 2019
Our New Master Class Video

Thursday, March 21, 2019
Tech Data’s Goodwill Adjustment

Tuesday, March 19, 2019
There’s Taxes, and There’s Taxes

Saturday, March 16, 2019
Adventures in Tax Cuts and Net Income

Monday, March 11, 2019
Big Moves in Goodwill, Intangible Value

Friday, March 8, 2019
CVS, Goodwill, and Enterprise Value

Thursday, February 28, 2019
Summary of Our Goodwill Research/ How-To

Wednesday, February 27, 2019
What Does ‘Other’ Mean? An Example

Thursday, February 21, 2019
Another Tale, Buried in the Footnotes

Wednesday, February 13, 2019
Low Latency Calcbench

Monday, February 11, 2019
Now Streaming on Hulu: Red Ink

Thursday, February 7, 2019
Early Look at 2018 Tax Decline

Wednesday, February 6, 2019
You Revised WHAT, Netflix?

Archive  |  Search:
Tech Data’s Goodwill Adjustment
Thursday, March 21, 2019

We often like to talk about goodwill on the corporate balance sheet, and whether the goodwill reported in a corporate merger lives up to expectations. Today we have an small example of how quickly those thoughts can change.

The example comes from Tech Data Corp. ($TECD), a data services firm based in Florida. In February 2017 Tech Data acquired the assets of “TS,” the technology solutions subsidiary of Avnet, for $2.8 billion. The deal was meant to expand Tech Data’s reach globally, including into Asia-Pacific. Remember that detail.

The purchase price included $727 million recorded in goodwill (roughly 26 percent of total deal price), as shown in the purchase-price allocation Tech Data elaborated, below.



OK, sounds reasonable enough so far. But Tech Data took 18 months to integrate TS into its operations fully. When Tech Data finally filed its 2018 Form 10-K on March 20, we skimmed the goodwill disclosures and noticed this gem below. Emphasis added in blue.



In other words, by the time Tech Data’s TS integration was fully complete, its Asia-Pacific operations were deemed not all they were once cracked up to be. So Tech Data had to trim the goodwill from this deal by 6.5 percent of the original $727 million.

As we said, it’s a small example, but a telling one. (We also have much more goodwill research you can peruse on our Research page.) Calcbench subscribers can always try to anticipate goodwill impairments by poring over segment disclosures, following management discussion and statements closely — and of course, setting up email alerts on the companies you do follow, so you can start digging into the data as soon as fresh data arrives.


FREE Calcbench Premium
Two Week Trial

Research Financial & Accounting Data Like Never Before. More features and try our Excel add-in. Sign up now to try the Premium Suite.