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Goodwill and Identifiable Intangible Assets | 6 Months Ended
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Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Identifiable Intangible Assets | 8. Goodwill and Identifiable Intangible Assets Goodwill We test goodwill for impairment at least annually as of our measurement date of May 31st 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. During the second quarter, we identified triggering events within our Americas reporting unit indicating that it was more likely than not that an impairment loss had been incurred. The triggering events included a decline in forecasted cash flows, within specific product categories, and a decline in our stock price. Accordingly, as of May 31, 2024, we completed an impairment assessment, on a quantitative basis, of goodwill for both the Americas and International reporting units. The result of our assessment was that the fair value of the Americas reporting unit did not exceed its carrying value resulting in an impairment charge of $127.5 million. The result of our assessment was that the fair value of the International reporting unit exceeded its carrying value and concluded that no impairment existed. Estimating the fair value of each reporting unit requires us to make assumptions and estimates regarding our future. We utilized a combination of discounted cash flows and market approach. The financial projections used in the valuation models reflected management's assumptions regarding revenue growth rates, economic and market trends, cost structure, discount rate, and other expectations about the anticipated short-term and long-term operating results for each of our two reporting units. We believe the assumptions used in our goodwill impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each reporting unit. However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future. If our assumptions regarding future performance are not achieved, or if future events occur that adversely affect our enterprise value, we may be required to record additional goodwill impairment charges in future periods. Changes in the net carrying amount of goodwill by segment were as follows:
(in millions) |  | ACCO Brands Americas |  |  | ACCO Brands International |  |  | Total |
Balance at December 31, 2023 |  | $ | 383.6 |  |  | $ | 206.4 |  |  | $ | 590.0 |
Goodwill impairment |  |  | (127.5 | ) |  |  | — |  |  |  | (127.5 | )
Foreign currency translation |  |  | (1.5 | ) |  |  | (9.7 | ) |  |  | (11.2 | )
Balance at June 30, 2024 |  | $ | 254.6 |  |  | $ | 196.7 |  |  | $ | 451.3 |
The goodwill balance includes $403.3 million and $530.8 million of accumulated impairment losses as of December 31, 2023 and June 30, 2024, respectively. Identifiable Intangible Assets We test indefinite-lived intangibles for impairment at least annually as of our measurement date of May 31st 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. During the second quarter, we identified a triggering event for our indefinite-lived trade names within our Americas reporting unit indicating that it was more likely than not that an impairment loss had been incurred. The triggering event was a decline in forecasted cash flows within certain product categories. Accordingly, as of May 31, 2024, we completed an impairment assessment, on a quantitative basis, for our indefinite-lived trade names. The result of our assessment was that the fair value of the Five Star® indefinite-lived trade name did not exceed its carrying value resulting in an impairment charge of $37.7 million. The result of our assessment of the Swingline® and ACCO® indefinite-lived trade names was that the fair value of each exceeded its carrying value and we concluded that no impairment existed. Estimating the fair value of each trade name requires us to make assumptions and estimates regarding our future. We utilized a relief-from-royalty discounted cash flows approach. The financial projections used in the valuation models reflected management's assumptions regarding revenue growth rates, economic and market trends, royalty rate, discount rate, and other expectations about the anticipated short-term and long-term operating results for each of our three indefinite-lived trade names. We believe the assumptions used in our impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each our indefinite-lived trade names. However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our indefinite-lived intangible impairment testing, will prove to be an accurate prediction of the future. As of June 1, 2024, we changed our Five Star® and Swingline® indefinite-lived trade names to amortizable intangible assets as they no longer met the indefinite-lived criteria. We began amortizing both trade names on a straight-line basis over a life of 30 years as of June 1, 2024. The gross carrying value and accumulated amortization by class of identifiable intangible assets as of June 30, 2024 and December 31, 2023, were as follows:
|  | June 30, 2024 |  |  | December 31, 2023 |
(in millions) |  | Gross Carrying Amounts |  |  | Accumulated Amortization |  |  | Net Book Value |  |  | Gross Carrying Amounts |  |  | Accumulated Amortization |  |  | Net Book Value |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade names(1) |  | $ | 101.2 |  |  | $ | (44.5 | ) |  | $ | 56.7 |  |  | $ | 295.1 |  |  | $ | (44.5 | ) |  | $ | 250.6 |
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade names(2) |  |  | 639.8 |  |  |  | (148.9 | ) |  |  | 490.9 |  |  |  | 497.1 |  |  |  | (142.0 | ) |  |  | 355.1 |
Customer and contractual relationships |  |  | 357.0 |  |  |  | (226.4 | ) |  |  | 130.6 |  |  |  | 362.4 |  |  |  | (221.3 | ) |  |  | 141.1 |
Vendor relationships |  |  | 82.4 |  |  |  | (19.5 | ) |  |  | 62.9 |  |  |  | 82.4 |  |  |  | (16.7 | ) |  |  | 65.7 |
Patents |  |  | 8.0 |  |  |  | (5.4 | ) |  |  | 2.6 |  |  |  | 8.2 |  |  |  | (5.0 | ) |  |  | 3.2 |
Subtotal |  |  | 1,087.2 |  |  |  | (400.2 | ) |  |  | 687.0 |  |  |  | 950.1 |  |  |  | (385.0 | ) |  |  | 565.1 |
Total identifiable intangibles |  | $ | 1,188.4 |  |  | $ | (444.7 | ) |  | $ | 743.7 |  |  | $ | 1,245.2 |  |  | $ | (429.5 | ) |  | $ | 815.7 |
(1) Accumulated amortization prior to the adoption of authoritative guidance on goodwill and other intangible assets, at which time further amortization ceased. (2) Reflects the change of two indefinite-lived trade names from indefinite-lived intangibles to amortizable intangible assets as of June 1, 2024. The Company's intangible amortization expense for the three and six months ended June 30, 2024 was $10.9 million and $21.5 million, respectively, and $11.0 million and $21.9 million for the three and six months ended June 30, 2023, respectively. Estimated amortization expense for amortizable intangible assets, as of June 30, 2024, for the current year and the next five years is as follows:
(in millions) |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | 2027 |  |  | 2028 |  |  | 2029 |
Estimated amortization expense(3) |  | $ | 45.1 |  |  | $ | 45.7 |  |  | $ | 43.6 |  |  | $ | 41.2 |  |  | $ | 39.0 |  |  | $ | 37.2 |
(3) 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.

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