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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Note 9. Goodwill and Intangible Assets Goodwill at September 30, 2020 decreased to $56,041,000 from $203,743,000 at December 31, 2019. This $147,702,000 decrease was due to an impairment charge of $148,375,000 recognized in the second quarter of 2020, offset by changes in foreign currency rates period over period. The Company's goodwill is reported in both the Golf Equipment and Apparel, Gear and Other operating segments (see Note 19). In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” the Company’s goodwill and non-amortizing intangible assets are subject to an annual impairment test or more frequently when impairment indicators are present. During the second quarter of 2020, the Company performed a qualitative assessment of goodwill impairment indicators, considering macroeconomic conditions related to the COVID-19 pandemic and its potential impact to sales and operating income for the remainder of fiscal 2020 and potentially beyond. As a result, the Company determined that there were indicators of impairment, and proceeded with a quantitative assessment of goodwill for all reporting units during the second quarter. In performing the second quarter quantitative goodwill impairment testing, the Company prepared valuations of its reporting units using both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed. The Company's reporting units are one level below its reportable segment level. In preparing the valuations, past, present and future expectations of performance were considered, including the impact of the COVID-19 pandemic. This methodology was consistent with the approach used to perform the annual quantitative goodwill assessment in prior years. The weighted average cost of capital used in the goodwill impairment testing ranged between 9.0% and 9.25%, which was derived from the financial structures of comparable companies corresponding to the industry of each reporting unit. There is inherent uncertainty associated with key assumptions used in the Company's impairment testing, including the duration of the economic downturn associated with the COVID-19 pandemic and the estimated recovery period. As a result of the second quarter assessment, the Company determined that the fair value for one reporting unit was less than its carrying value, and therefore recognized a goodwill impairment loss of $148,375,000 in the second quarter of 2020. The expected decline in revenue due to the impact of COVID-19 contributed to the lower fair value of the Jack Wolfskin reporting unit, which is included in the Apparel, Gear and Other operating segment. The Company determined that the goodwill relating to its other reporting units was not impaired as the fair value significantly exceeded the carrying value at June 30, 2020. There were no impairment charges recognized during the three months ended September 30, 2020. In addition, the Company determined that the trade name intangible asset related to Jack Wolfskin was also impaired and recognized an impairment loss of $25,894,000 in the second quarter of 2020. The carrying value of intangible assets after the impairment was $437,546,000 at September 30, 2020. There were no impairment charges recognized during the three months ended September 30, 2020. The following sets forth the intangible assets by major asset class (dollars in thousands):
| Useful Life (Years) |  | September 30, 2020 |  | December 31, 2019
| Gross(1) |  | Accumulated Amortization |  | Net Book Value |  | Gross |  | Accumulated Amortization |  | Net Book Value
Indefinite-lived: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade name, trademark, trade dress and other | NA |  | $ | 437,546 |  |  |  | $ | — |  |  |  | $ | 437,546 |  |  | $ | 453,837 |  |  |  | $ | — |  |  |  | $ | 453,837 |
Amortizing: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Patents | 2-16 |  | 31,581 |  |  |  | 31,581 |  |  |  | — |  |  | 31,581 |  |  |  | 31,581 |  |  |  | — |
Customer and distributor relationships and other | 1-10 |  | 55,794 |  |  |  | 18,367 |  |  |  | 37,427 |  |  | 53,904 |  |  |  | 14,318 |  |  |  | 39,586 |
Total intangible assets |  |  | $ | 524,921 |  |  |  | $ | 49,948 |  |  |  | $ | 474,973 |  |  | $ | 539,322 |  |  |  | $ | 45,899 |  |  |  | $ | 493,423 |
(1) The gross balance of intangible assets as of September 30, 2020 includes an increase due to the impact of foreign exchange rates of $9,603,000 on the Jack Wolfskin non-amortizing intangible asset, as well as $1,554,000 on the amortizing customer and distributor relationships. Aggregate amortization expense of intangible assets was approximately $1,321,000 and $1,113,000 for the three months ended September 30, 2020 and 2019, respectively, and $3,714,000 and $3,579,000 for the nine months ended September 30, 2020 and 2019, respectively. Amortization expense related to intangible assets at September 30, 2020 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):
Remainder of 2020 | $ | 3,586 |
2021 | 4,724 |
2022 | 4,548 |
2023 | 4,409 |
2024 | 4,409 |
Thereafter | 15,751 |
| $ | 37,427 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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