Goodwill And Identifiable Intangibles

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

9. Goodwill and Identifiable Intangible Assets

Goodwill

As more fully described in the Company’s 2019 Annual Report on Form 10-K, we test goodwill for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. The Company performed this annual assessment, on a qualitative basis, as allowed by GAAP, in the second quarter of 2019 and concluded that no impairment existed.

Changes in the net carrying amount of goodwill by segment were as follows:



(in millions)	ACCO Brands North America		ACCO Brands EMEA		ACCO Brands International			Total
(in millions)	ACCO Brands North America		ACCO Brands EMEA		ACCO Brands International			Total
Balance at December 31, 2019	$	375.6	$	165.7	$	177.3		$	718.6
Acquisitions	—		—		(0.5		)	(0.5		)
Foreign currency translation	—		2.1		(2.5		)	(0.4		)
Balance at March 31, 2020	$	375.6	$	167.8	$	174.3		$	717.7

The goodwill balance is net of $215.1 million of accumulated impairment losses, which occurred prior to December 31, 2016.

Identifiable Intangible Assets

Foroni Acquisition

The valuation of identifiable intangible assets of $11.1 million acquired in the Foroni Acquisition includes an amortizable trade name, "Foroni^®," which has been recorded at its estimated fair value. The fair value of the trade name was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The Foroni^® trade name is expected to be amortized over 23 years on a straight-line basis.

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of March 31, 2020 and December 31, 2019, was as follows:



	March 31, 2020								December 31, 2019
(in millions)	Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names	$	454.2	$	(44.5	)	⁽¹⁾	$	409.7	$	467.3	$	(44.5	)	⁽¹⁾	$	422.8
Amortizable intangible assets:
Trade names	308.4		(85.8		)		222.6		316.7		(83.7		)		233.0
Customer and contractual relationships	232.9		(143.2		)		89.7		241.0		(142.3		)		98.7
Patents	5.4		(1.5		)		3.9		5.5		(1.4		)		4.1
Subtotal	546.7		(230.5		)		316.2		563.2		(227.4		)		335.8
Total identifiable intangibles	$	1,000.9	$	(275.0	)		$	725.9	$	1,030.5	$	(271.9	)		$	758.6


(1)	Accumulated amortization prior to the adoption of authoritative guidance on goodwill and other intangible assets, at which time further amortization ceased.

The intangible amortization expense was $8.4 million and $9.3 million for the three months ended March 31, 2020 and 2019, respectively.

Estimated amortization expense for amortizable intangible assets as of March 31, 2020, for the current year and the next five years is as follows:



(in millions)	2020		2021		2022		2023		2024		2025
Estimated amortization expense⁽²⁾	$	32.0	$	28.4	$	24.9	$	22.6	$	21.0	$	19.4


(2)	Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets and other events.

We test indefinite-lived intangibles for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. We performed this annual assessment, on a qualitative basis, as allowed by GAAP, for our indefinite-lived trade names in the second quarter of 2019 and concluded that no impairment existed.

COVID-19 Impact

We continue to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for demand for our products and the impact on our business and our overall financial performance. This includes our risk of impairment losses to our goodwill and indefinite-lived intangible assets. Although the potential impact of COVID-19 related demand is uncertain, we remain committed to the strategic actions necessary to preserve the long-term forecasted financial performance and expect the macroeconomic environment will recover in the medium to long-term. As a result of our analysis, and consideration of events and circumstances, we concluded that there were no triggering events that would make it more likely than not that our goodwill or indefinite-lived intangible assets were impaired as of March 31, 2020.