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Note 6 - Impairment of Long-lived Assets

6 Months Ended

Jul. 31, 2023

Note 6 - Impairment of long-lived assets

The Company's assessment of long-lived assets, and other identifiable intangibles is based upon factors that market participants would use in accordance with the accounting guidance for the fair value measurement of assets. At July 31, 2023, the Company assessed whether there were any triggering events that may have occurred which could indicate that more likely than not that the fair values of the Company's long-lived assets exceeded their carrying values, and an impairment may exist. Based on this assessment, the Company determined that it was more likely than not that the fair values of the Company's long-lived assets exceeded their carrying values, and no impairment indicator exists with respect to the Company's long-lived assets for the three and six months ended July 31, 2023 and 2022. The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.

Goodwill. The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. All identifiable goodwill as of July 31, 2023 and January 31, 2023 was attributable to the purchase of the remaining 50% interest in Perma-Pipe Canada, Ltd., which occurred in 2016.

(In thousands)

January 31, 2023

Foreign exchange change effect

July 31, 2023

Goodwill

$2,227

$29

$2,256

The Company performs an impairment assessment of goodwill annually as of January 31, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. At July 31, 2023, the Company assessed potential triggering events that may have occurred which could indicate that more likely than not that the fair value of recognized goodwill exceeded its carrying value, and an impairment may exist. In performing this assessment, the Company determined that the fair value exceeded its carrying value, and no potential impairment exists with respect to the Company's goodwill for the three or six months ended July 31, 2023. The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.