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GOODWILL | 6 Months Ended
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Jun. 30, 2021
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 $4.8 million and $5.9 million as of June 30, 2021 and December 31, 2020, respectively, all of which was related to the Company's CoreCivic Safety 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. CoreCivic expects its managed-only contract for the 1,030-bed Marion County Jail in Indianapolis, Indiana to be terminated and operations to be transitioned to Marion County. Marion County is constructing a replacement facility that is currently expected to be complete near the end of 2021. The County intends to redevelop the property where the Marion County Jail is located, and CoreCivic received notice in the second quarter of 2021 that the County intends to terminate the management contract effective December 31, 2021. As a result of this expected contract termination, during the second quarter of 2021, the Company recognized an asset impairment charge of $2.9 million, including $1.1 million for goodwill and $1.8 million for other assets, associated with this managed-only facility's reporting unit.

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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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