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Goodwill | 9 Months Ended
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Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill | NOTE 5: GOODWILL We assess goodwill, which is not amortized, for impairment annually during the fourth quarter, or more frequently, if events and circumstances indicate impairment may have occurred. We test goodwill for impairment at the reporting unit level. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety. Accordingly, the fair value of the reporting unit as a whole is available to support the recoverability of its goodwill. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. During the second quarter of 2022, subsequent to our annual impairment test in the fourth quarter of 2021, the composition of our reportable segments was changed, as discussed in “Note 14: Segment Information.” Following the change in reportable segments, our new reporting units for the purposes of goodwill impairment testing are as follows: (1) Tripadvisor Core, (2) Viator (formerly Experiences), and (3) TheFork. The Tripadvisor Core reporting unit includes the operations of the following legacy reporting units (including the carrying value of their related goodwill): Hotels, Media & Platform, Rentals, Flights & Car, Cruises, and Tripadvisor Restaurants. As a result of this reporting unit change, we performed a qualitative assessment on our legacy reporting units prior to operationalizing the new segment reporting structure and determined that it was more likely than not that the fair value of all legacy reporting units was greater than the carrying value, which is consistent with our conclusion reached in the fourth quarter of 2021. As part of our qualitative assessment for our goodwill impairment analysis of our legacy reporting units, the factors that we considered included, but were not limited to: (a) changes in macroeconomic conditions in the overall economy and the specific markets in which we operate, (b) our ability to access capital, (c) changes in the online travel industry, (d) changes in the level of competition, (e) evaluation of current and future forecasted financial results of the reporting units, (f) comparison of our current financial performance to historical and budgeted results of the reporting units, (g) change in excess of the Company’s market capitalization over its book value, (h) changes in estimates, valuation inputs, and/or assumptions since the last quantitative analysis of the reporting units, (i) changes in the regulatory environment, (j) changes in strategic outlook or organizational structure and leadership of the reporting units, and (k) other relevant factors, and how these factors might impact specific performance in future periods. We then performed a goodwill impairment test for each of our three new reporting units (Tripadvisor Core, Viator, and TheFork) upon the change in reportable segments using a quantitative assessment. We concluded the estimated fair values were significantly in excess of the carrying values for these reporting units, and therefore, no indications of impairment were identified as a result of these changes. Management exercised judgment related to the determination of the fair value of our new reporting units. The fair value of our reporting units were estimated using an equal weighting of a market approach by using public company multiples and/or other precedent transactions and a discounted cash flow methodology. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. This analysis requires significant judgment, including estimation of future cash flows, which is dependent on internal forecasts, the estimation of the long-term growth rate and profitability of the reporting unit, determination of the Company's weighted average cost of capital and income tax rates. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units. Significant changes in these estimates and assumptions could materially affect the fair value of the reporting unit, potentially resulting in a non-cash impairment charge.
|  | Hotels, Media & Platform |  |  | Experiences & Dining |  |  | Other (2) |  |  | Tripadvisor Core |  |  | Viator |  |  | TheFork |  |  | Total |
|  | (in millions) |
Balance as of December 31, 2021 |  | $ | 407 |  |  | $ | 344 |  |  | $ | 92 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 843 |
Foreign currency translation adjustments |  |  | — |  |  |  | (18 | ) |  |  | (5 | ) |  |  | (3 | ) |  |  | (3 | ) |  |  | (11 | ) |  |  | (40 | )
Allocation to new segments (1) |  |  | (407 | ) |  |  | (326 | ) |  |  | (87 | ) |  |  | 599 |  |  |  | 120 |  |  |  | 101 |  |  |  | — |
Balance as of September 30, 2022 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 596 |  |  | $ | 117 |  |  | $ | 90 |  |  | $ | 803 |
(1) See “Note 14: Segment Information” for information regarding our reportable segment changes in the second quarter of 2022. (2) Other consists of the combination of Rentals, Flights & Car, and Cruises, and did not previously constitute a reportable segment. There were no goodwill impairment charges recognized to our unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2022 and 2021. As of both September 30, 2022 and December 31, 2021, accumulated goodwill impairment losses tota led $3 million, which was associated with the Tripadvisor Core segment as of September 30, 2022 and Other as of December 31, 2021.

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