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Goodwill | 12 Months Ended
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Sep. 30, 2019
Goodwill [Abstract] |
Goodwill | Note 12. Goodwill
|  | September 30, 2018 |  | Additions |  | Effects of Foreign Currency Translation |  | September 30, 2019
Aerospace |  | $ | 455,423 |  | $ | - |  | $ | - |  | $ | 455,423
Industrial |  |  | 357,827 |  |  | - |  |  | (15,397) |  |  | 342,430
Consolidated |  | $ | 813,250 |  | $ | - |  | $ | (15,397) |  | $ | 797,853
|  | September 30, 2017 |  | Additions |  | Effects of Foreign Currency Translation |  | September 30, 2018
Aerospace |  | $ | 455,423 |  | $ | - |  | $ | - |  | $ | 455,423
Industrial |  |  | 101,122 |  |  | 257,447 |  |  | (742) |  |  | 357,827
Consolidated |  | $ | 556,545 |  | $ | 257,447 |  | $ | (742) |  | $ | 813,250
On June 1, 2018, Woodward completed the acquisition of L’Orange (see Note 5, Business acquisition), which resulted in the recognition of $257,447 in goodwill in the Company’s Industrial segment. Woodward tests goodwill for impairment at the reporting unit level on an annual basis or at any time there is an indication goodwill may be impaired, commonly referred to as triggering events. Woodward completed its annual goodwill impairment test as of July 31, 2019 during the quarter ended September 30, 2019. At that date, Woodward determined it was appropriate to aggregate certain components of the same operating segment into a single reporting unit. The fair value of each of Woodward’s reporting units was determined using a discounted cash flow method. This method represents a level 3 input and incorporates various estimates and assumptions, the most significant being projected revenue growth rates, earnings margins, future tax rates, and the present value, based on an estimated weighted-average cost of capital (or the discount rate) and terminal growth rate, of forecasted cash flows. Management projects revenue growth rates, earnings margins and cash flows based on each reporting unit’s current operational results, expected performance and operational strategies over a ten-year period. These projections are adjusted to reflect current economic conditions and demand for certain products, and require considerable management judgment. Forecasted cash flows used in the July 31, 2019 impairment test were discounted using weighted-average cost of capital assumptions ranging from 9.35% to 17.41%. The terminal values of the forecasted cash flows were calculated using the Gordon Growth Model and assumed an annual compound growth rate after ten years of 3.39%. These inputs, which are unobservable in the market, represent management’s best estimate of what market participants would use in determining the present value of the Company’s forecasted cash flows. Changes in these estimates and assumptions can have a significant impact on the fair value of forecasted cash flows. Woodward evaluated the reasonableness of the reporting units’ resulting fair values utilizing a market multiple method. As discussed at Note 21, Commitments and contingencies, on April 9, 2019, German wind turbine manufacturer, Senvion GmbH (“Senvion”), a significant customer of Woodward’s renewables business, announced that it filed for self-administration insolvency proceedings. In conjunction with this, during the three-months ended June 30, 2019, Woodward determined that this action by Senvion represented a triggering event requiring an interim goodwill impairment test of its renewable power systems reporting unit. Based on the results of this interim impairment test, Woodward determined the renewable power systems reporting unit’s goodwill was not impaired as of June 30, 2019. The results of Woodward’s goodwill impairment tests performed as of July 31, 2019 did not indicate impairment of any of Woodward’s reporting units. As of the July 31, 2019 goodwill impairment test, the reporting unit with the closest ratio of estimated fair value to carrying value was our renewable power systems reporting unit, due primarily to the loss of Senvion as a customer. Woodward’s July 31, 2019 goodwill analysis indicated a premium of approximately 20% compared to the renewable power system’s carrying value. Woodward is not aware of any facts, circumstances or triggering events that have arisen indicating that goodwill has been impaired or that the premium of approximately 20% has changed significantly since Woodward’s July 31, 2019 analysis.

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