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Value of Business Acquired, Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Value of Business Acquired, Goodwill and Other Intangible Assets

5) Value of Business Acquired, Goodwill and Other Intangible Assets

Information with regard to value of business acquired was as follows:

Schedule of Value of Business Acquired

	2022			2021
	December 31
	2022			2021
Balance at beginning of year	$	8,421,432		$	8,955,249
Value of business acquired		2,136,085			586,840
Imputed interest at 7% included in earnings		642,919	(1)		613,028	(1)
Amortization included in earnings		(1,907,250	)(1)		(1,728,157	)(1)
Shadow amortization included in other comprehensive income		510,550			(5,528	)
Net amortization		(753,781	)		(1,120,657	)
Balance at end of year	$	9,803,736		$	8,421,432

(1)

Included in Amortization of deferred policy and pre-need acquistion costs and value of business acquired on the consolidated statements of earnings

Presuming no additional acquisitions, net amortization charged to income is expected to approximate the following:


2023	$	1,181,000
2024		1,098,000
2025		995,000
2026		924,000
2027		841,000
Thereafter		4,764,736
Total	$	9,803,736

Actual amortization may vary based on changes in assumptions or experience. As of December 31, 2022, value of business acquired is being amortized over a weighted average life of 5.7 years.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

5) Value of Business Acquired, Goodwill and Other Intangible Assets (Continued)

Information regarding goodwill by segment was as follows:

Schedule of Goodwill by Segment

	Life Insurance		Cemetery/ Mortuary			Total
Balance at January 1, 2021:
Goodwill	$	2,765,570	$	754,018		$	3,519,588
Accumulated impairment		-		-			-
Total goodwill, net		2,765,570		754,018			3,519,588

Acquisition		-		1,734,195	(1)		1,734,195

Balance at December 31, 2021:
Goodwill		2,765,570		2,488,213			5,253,783
Accumulated impairment		-		-			-
Total goodwill, net		2,765,570		2,488,213			5,253,783

Acquisition		-		-			-

Balance at December 31, 2022:
Goodwill		2,765,570		2,488,213			5,253,783
Accumulated impairment		-		-			-
Total goodwill, net	$	2,765,570	$	2,488,213		$	5,253,783

(1)

See Note 20 regarding the acquisition of Rivera Funerals, Cremations and Memorial Gardens and Holbrook Mortuary

Goodwill is not amortized but is tested annually for impairment. The annual impairment tests resulted in no impairment of goodwill for the years ended December 31, 2022 and 2021.

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021

5) Value of Business Acquired, Goodwill and Other Intangible Assets (Continued)

The carrying value of the Company’s other intangible assets were as follows which is included in other assets:

		December 31
	Useful Life	2022			2021
Intangible asset - trade name (1)	15 years	$	2,100,000		$	2,100,000
Intangible asset - customer lists	15 years		890,000			890,000
Intangible asset - trade name (2)	15 years		610,000			610,000
Intangible assets - other (1)	15 years		210,000			210,000
Less accumulated amortization			(553,333	)		(297,333	)
Balance at end of year		$	3,256,667		$	3,512,667

(1)

See Note 20 regarding the acquisition of Rivera Funerals, Cremations and Memorial Gardens

(2)

Kilpatrick Life

Amortization expense for the years ended December 31, 2022 and 2021 was $256,000 and $99,999, respectively, and is included in other expenses on the consolidated statements of earnings.

The following table summarizes the Company’s estimate of future amortization for the other intangible assets:


2023	$	254,000
2024		254,000
2025		254,000
2026		254,000
2027		254,000
Thereafter		1,986,667
Total	$	3,256,667

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2022 and 2021