Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Note 9. Goodwill and Intangible Assets

Changes in the carrying amount of goodwill by operating and reportable segment are as follows (in thousands):


	Topgolf		Golf Equipment		Apparel, Gear and Other		Total
Balance at December 31, 2020	$	—	$	27,025	$	29,633		$	56,658
Acquisitions	1,405,556		504,690		58,665			$	1,968,911
Impairments	—		—		—			$	—
Foreign currency translation	—		(394)		—			$	(394)
Balance at September 30, 2021	$	1,405,556	$	531,321	$	88,298		$	2,025,175

Goodwill at September 30, 2021 increased to $2,025,175,000 from $56,658,000 at December 31, 2020. This $1,968,517,000 increase was primarily due to the addition of $1,968,911,000 in goodwill in connection with the Topgolf merger in March 2021, of which the Company attributed $1,405,556,000 to the Topgolf business, and $504,690,000 and $58,665,000 to the golf equipment and apparel businesses, respectively (see Note 6). This increase was partially offset by changes in foreign currency rates period over period.

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. As of September 30, 2021 and December 31, 2020, the Company recognized accumulated impairment losses on goodwill of $148,375,000. There were no impairment losses recognized during the three or nine months ended September 30, 2021.

The following sets forth the intangible assets by major asset class (dollars in thousands):


	Useful Life (Years)	September 30, 2021
		Gross(1)		Accumulated Amortization			Translation Adjustment			Net Book Value
Indefinite-lived:
Trade name, trademark, trade dress and other	NA	$	1,441,003		$	—		$	11,893	$	1,429,110
Liquor licenses	NA	7,756			—			—		7,756
Amortizing:
Patents	2-16	32,041			31,645			—		396
Customer and distributor relationships and other	1-10	61,378			25,195			1,757		34,426
Developed technology	10	69,821			3,909			553		65,359
Total intangible assets		$	1,611,999		$	60,749		$	14,203	$	1,537,047


	Useful Life (Years)	December 31, 2020
		Gross		Accumulated Amortization			Net Book Value
Indefinite-lived:
Trade name, trademark, trade dress and other	NA	$	446,803		$	—		$	446,803

Amortizing:
Patents	2-16	31,581			31,581			—
Customer and distributor relationships and other	1-10	57,309			19,773			37,536

Total intangible assets		$	535,693		$	51,354		$	484,339

(1) The gross balance of intangible assets as of September 30, 2021 includes additions of $1,001,600,000 and $74,529,000 in indefinite-lived and amortizing intangible assets, respectively, related to the Topgolf merger that was completed on March 8, 2021.

The Company recognized amortization expense related to intangible assets of $3,358,000 and $1,321,000 for the three months ended September 30, 2021 and 2020, respectively, and $9,395,000 and $3,714,000 for the nine months ended September 30, 2021 and 2020, respectively, in selling, general and administrative expenses in the accompanying consolidated condensed statements of operations.

Amortization expense related to intangible assets at September 30, 2021 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):


Remainder of 2021	$	7,233
2022	13,177
2023	11,616
2024	11,471
2025	11,395
Thereafter	45,289
	$	100,181