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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2022
Goodwill and Other Intangible Assets [Abstract] |
Goodwill and Other Intangible Assets | 8. Goodwill and Other Intangible Assets Goodwill We assess the impairment of long‑lived and identifiable intangibles assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. With respect to goodwill, we test for impairment on an annual basis or in interim periods if an event occurs or circumstances change that may indicate the fair value of a reporting unit is below its carrying amount. We completed our annual impairment test of goodwill as of December 31, 2022. When performing our evaluation of goodwill for impairment, if we conclude qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative impairment test would not be required. If we are unable to reach this conclusion, then we would perform a goodwill quantitative impairment test. In performing the quantitative test, the fair value of the reporting unit is compared to its carrying amount. A charge for impairment is recognized by the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. In light of the negative year-over-year impact on our company’s performance in the year ended December 31, 2022 of inflationary cost increases in raw materials, labor, transportation and freight costs, and the increase in interest rates, and the recent decline in our stock price, we elected to bypass the qualitative assessment at December 31, 2022 and have decided to perform a quantitative impairment test for goodwill at both the Engine Management and Temperature Control reporting units. The fair values of the Engine Management and Temperature Control reporting units were determined based upon the Income Approach, which estimates the fair value based on future discounted cash flows, and the Market Approach, which estimates the fair value based on market prices of comparable companies. We base our fair value estimates on projected financial information which we believe to be reasonable. We also considered our total market capitalization as of December 31, 2022. Our December 31, 2022 annual goodwill impairment analysis did not result in an impairment charge as it was determined that the fair values of our Engine Management and Temperature Control reporting units were in excess of their carrying amounts. While the fair values exceed the carrying amounts at the present time and we do not believe that impairments are probable, we will need to maintain the ongoing performance of the business at current projected levels in future periods to sustain their carrying values. Changes in the carrying values of goodwill by operating segment during the years ended December 31, 2022 and 2021 are as follows (in thousands):
|  | Engine Management |  |  | Temperature Control |  |  | Total |
Balance as of December 31, 2020: |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 102,055 |  |  | $ | 14,270 |  |  | $ | 116,325 |
Accumulated impairment losses |  |  | (38,488 | ) |  |  | — |  |  |  | (38,488 | )
|  | $ | 63,567 |  |  | $ | 14,270 |  |  | $ | 77,837 |
Activity in 2021 |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of Trombetta |  |  | 49,250 |  |  |  | — |  |  |  | 49,250 |
Acquisition of Stabil |  |  | 4,827 |  |  |  | — |  |  |  | 4,827 |
Foreign currency exchange rate change |  |  | (262 | ) |  |  | — |  |  |  | (262 | )
Balance as of December 31, 2021: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 155,870 |  |  |  | 14,270 |  |  |  | 170,140 |
Accumulated impairment losses |  |  | (38,488 | ) |  |  | — |  |  |  | (38,488 | )
|  | $ | 117,382 |  |  | $ | 14,270 |  |  | $ | 131,652 |
Activity in 2022 |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of Kade |  |  | — |  |  |  | 766 |  |  |  | 766 |
Foreign currency exchange rate change |  |  | (402 | ) |  |  | 71 |  |  |  | (331 | )
Balance as of December 31, 2022: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 155,468 |  |  |  | 15,107 |  |  |  | 170,575 |
Accumulated impairment losses |  |  | (38,488 | ) |  |  | — |  |  |  | (38,488 | )
|  | $ | 116,980 |  |  | $ | 15,107 |  |  | $ | 132,087 |
Acquired Intangible Assets Acquired identifiable intangible assets as of December 31, 2022 and 2021 consist of:
|  | December 31, |
|  | 2022 |  |  | 2021 |
|  | (In thousands) |
Customer relationships |  | $ | 158,717 |  |  | $ | 157,020 |
Patents, developed technology and intellectual property |  |  | 14,123 |  |  |  | 14,123 |
Trademarks and trade names |  |  | 8,880 |  |  |  | 8,880 |
Non-compete agreements |  |  | 3,282 |  |  |  | 3,280 |
Supply agreements |  |  | 800 |  |  |  | 800 |
Leaseholds |  |  | 160 |  |  |  | 160 |
Total acquired intangible assets |  |  | 185,962 |  |  |  | 184,263 |
Less accumulated amortization (1) |  |  | (86,945 | ) |  |  | (78,932 | )
Net acquired intangible assets |  | $ | 99,017 |  |  | $ | 105,331 |
| (1) | Applies to all intangible assets, except for a related trademark/trade name totaling $2.6 million, which has an indefinite useful life and, as such, is not being amortized.
Total amortization expense for acquired intangible assets was $8.6 million for the year ended December 31, 2022, $8.7 million for the year ended December 31, 2021, and $8.2 million for the year ended December 31, 2020. Based on the current estimated useful lives assigned to our intangible assets, amortization expense is estimated to be $8.5 million for 2023, $8.4 million in 2024, $8.4 million in 2025, $8.4 million in 2026 and $62.7 million in the aggregate for the years 2027 through 2041. For information related to identified intangible assets acquired in the Stabil, Trombetta, Soot Sensor and Kade acquisitions, see Note 2, “Business Acquisitions and Investments,” of the notes to our consolidated financial statements. Other Intangible Assets Other intangible assets include computer software. Computer software as of December 31, 2022 and 2021 totaled $18.7 million and $17.4 million, respectively. Total accumulated computer software amortization as of December 31, 2022 and 2021 was $17.2 million and $16.5 million, respectively. Computer software is amortized over its estimated useful life of 3 to 10 years. Amortization expense for computer software was $0.7 million, $0.3 million and $0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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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 https://asc.fasb.org/topic&trid=2144416 + Details
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