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GOODWILL | 6 Months Ended
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Jun. 30, 2020
GOODWILL |
3. | GOODWILL
ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment", establishes accounting and reporting requirements for goodwill and other intangible assets. Goodwill was $48.6 million and $50.5 million as of June 30, 2020 and December 31, 2019, respectively. Of this amount, goodwill was $6.0 million and $7.9 million as of June 30, 2020 and December 31, 2019, respectively, for the Company's CoreCivic Safety segment, and was $42.6 million as of both June 30, 2020 and December 31, 2019 for its CoreCivic Community segment. This goodwill was established in connection with multiple business combination transactions. Under the provisions of ASU 2017-04, CoreCivic performs a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company performs a quantitative impairment test. If a quantitative test is required, CoreCivic performs an assessment to identify the existence of impairment and to measure the excess of a reporting unit's carrying amount over its fair value by using a combination of various common valuation techniques, including market multiples and discounted cash flows under valuation methodologies that include an income approach and a market approach. The income valuation approach includes certain significant assumptions impacting projected future cash flows, such as projected revenue, projected operating costs, and the weighted average cost of capital, which are affected by expectations about future market or economic conditions. These impairment tests are required to be performed at least annually. CoreCivic performs its impairment tests during the fourth quarter, in connection with its annual budgeting process, and whenever circumstances indicate the carrying value of goodwill may not be recoverable. During the third quarter of 2020, the Company provided notice to its customers at two managed-only facilities of its intent to terminate the contracts. The Company expects to transition operations of both the 1,046-bed Silverdale Detention Center and the 1,348-bed Metro-Davidson County Detention Facility in the fourth quarter of 2020. As a result of these expected contract terminations, during the second quarter of 2020, the Company recognized goodwill impairments of $2.0 million associated with these two managed-only facilities' reporting units. The Company has continued to monitor the impact of the novel coronavirus ("COVID-19") with respect to the projections and assumptions used for its annual assessment performed in the fourth quarter of 2019. As of June 30, 2020, the Company concluded that it is more likely than not that the fair value of the reporting units exceeded their carrying values (with the exception of the impact of the contract terminations discussed above on two managed-only reporting units). However, the long-term impacts of COVID-19, if any, on future cash flows are difficult to predict. The Company can provide no assurance that additional goodwill impairments will not occur in the future as a result of the impact of COVID-19 or otherwise. The Company will conduct additional impairment tests if, and when, warranted by the impact of COVID-19 or other factors on the Company's reporting units.

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- Definition The entire disclosure for goodwill. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2144439 + Details
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