Goodwill |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | Goodwill The carrying value of goodwill as of December 31, 2022 and 2021, was $167.7 million and $363.3 million, respectively. As part of the annual goodwill impairment test conducted in the fourth quarter of 2022, the Company determined that the carrying value of its Culture Kings and Rebdolls reporting units exceeded their fair values and recorded a total non-cash goodwill impairment charge of $173.8 million during the year ended December 31, 2022. As of December 31, 2022, $60.0 million of goodwill related to Culture Kings remained, while the goodwill related to Rebdolls was fully impaired. The worsening economic trends in the fourth quarter of 2022, including continued inflation and rising interest rates, as well as unfavorable demand due to changing customer preferences towards a mix of online and physical store shopping led the Company to lower its forecasts and expectations for the Culture Kings and Rebdolls reporting units, driving the reduction in their fair values. No goodwill impairment was recorded for the year ended December 31, 2021. Additionally, as part of the annual goodwill impairment test conducted in the fourth quarter of 2022, it was determined that the estimated fair value of the mnml reporting unit exceeded the carrying value by 7%. The carrying value of the associated goodwill was $30.0 million.
The goodwill of acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill of acquired companies is generally not deductible for tax purposes.
The following table summarizes goodwill activity:
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- References No definition available.
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- Definition The entire disclosure for goodwill. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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