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GOODWILL | 12 Months Ended
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Dec. 31, 2019
GOODWILL [ABSTRACT] |
GOODWILL. | (6)GOODWILL Goodwill consisted of the following (in thousands):
|  |  |  |  |  |  |  |  |  |  | Effect of |  |  |  |
|  | December 31, |  | Acquisitions / |  |  |  |  | Foreign |  | December 31, |
|  | 2018 |  | Adjustments |  | Impairments |  | Currency |  | 2019 |
TTEC Digital |  | $ | 66,158 |  | $ | — |  | $ | — |  | $ | 117 |  | $ | 66,275 |
TTEC Engage |  |  | 138,475 |  |  | 96,993 |  |  | — |  |  | (49) |  |  | 235,419 |
Total |  | $ | 204,633 |  | $ | 96,993 |  | $ | — |  | $ | 68 |  | $ | 301,694 |
|  |  |  |  |  |  |  |  |  |  | Effect of |  |  |  |
|  | December 31, |  | Acquisitions / |  |  |  |  | Foreign |  | December 31, |
|  | 2017 |  | Adjustments |  | Impairments |  | Currency |  | 2018 |
TTEC Digital |  | $ | 65,791 |  | $ | 1,232 |  | $ | — |  | $ | (865) |  | $ | 66,158 |
TTEC Engage |  |  | 143,936 |  |  | (125) |  |  | — |  |  | (5,336) |  |  | 138,475 |
Total |  | $ | 209,727 |  | $ | 1,107 |  | $ | — |  | $ | (6,201) |  | $ | 204,633 |
Impairment The Company has three reporting units with goodwill and performs a goodwill impairment test on at least an annual basis. The Company conducts its annual goodwill impairment test during the fourth quarter, or more frequently, if indicators of impairment exist. For the annual goodwill impairment analysis, the Company elected to perform a Step 1 evaluation for all of its reporting units, which includes comparing a reporting unit’s estimated fair value to its carrying value. The determination of fair value requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term growth rates for the businesses, the useful lives over which the cash flows will occur and determination of appropriate discount rates (based in part on the Company’s weighted average cost of capital). Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. As of December 1, 2019, the date of the annual impairment testing, the Company concluded that for all three of the reporting units the fair values were in excess of their respective carrying values and the goodwill for those reporting units was not impaired. The process of evaluating the fair value of the reporting units is highly subjective and requires significant judgment and estimates as the reporting units operate in a number of markets and geographical regions. The Company used a market approach and an income approach to determine our best estimates of fair value which incorporated the following significant assumptions:
| · |  | Revenue projections, including revenue growth during the forecast periods ranging from (19.0)% to 10.0%;
| · |  | EBITDA margin projections held relatively flat over the forecast periods ranging from zero to 21.0%;
| · |  | Estimated income tax rates of 24.9% to 27.5%;
| · |  | Estimated capital expenditures ranging from $0.9 million to $47.0 million; and
| · |  | Discount rates ranging from 10% to 14% based on various inputs, including the risks associated with the specific reporting units, the country of operations as well as their revenue growth and EBITDA margin assumptions.
During the Company’s annual impairment testing as of December 1, 2019, the Company identified triggering events that could lead to impairment of goodwill for the Digital Consulting reporting unit, including lower revenues and profits than had been anticipated over the past two years. The carrying value of Digital Consulting was $39.7 million at December 1, 2019, including approximately $24.3 million of goodwill. Based on the Company’s assessment, the estimated fair value of the Digital Consulting reporting unit exceeded its carrying value by approximately 26%, but based on additional sensitivity analysis, the amount of cushion could fall to 0% or below if the performance of the business does not improve as expected. The estimate of fair value was based on generally accepted valuation techniques and information available at the date of the assessment, which incorporated management’s assumptions about expected revenues and future cash flows and available market information for comparable companies.

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- Definition The entire disclosure for goodwill. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2144439 + Details
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