|9 Months Ended|
Oct. 03, 2022
|Goodwill and Intangible Assets Disclosure [Abstract]|
The following table presents goodwill by reporting unit as of October 3, 2022:
The Company conducts its goodwill impairment test annually in December, and evaluates on a quarterly basis if indicators of impairment exist. The Company evaluates its goodwill based on its two reporting units, Anthony's and BurgerFi. As a result of a significant sustained decline in the Company’s share price and market capitalization during the six months ended June 30, 2022, the Company conducted its impairment test as of June 30, 2022.
ASC 350, Intangibles – Goodwill and Other (“ASC 350”) requires goodwill to be tested for impairment at the reporting unit level. For ASC 350 testing purposes, the Company compared the fair value of the reporting units with their carrying amounts. The fair value of the reporting units were estimated giving consideration to the Income Approach, including the discounted cash flow method, and the Market Approach, including the similar transactions method and guideline public company method. Significant inputs and assumptions in the analysis included forecasts (e.g., revenue, operating costs, capital expenditures, etc.), discount rate, long-term growth rate, tax rates, etc. for the reporting units under the Income Approach and market-based enterprise value to revenue multiples under the Market Approach.As a result of the ASC 350 analysis conducted as of June 30, 2022, the Company recognized a non-cash pre-tax impairment loss of $55.2 million during the nine months ended October 3, 2022 to write down the remaining carrying value of goodwill for the BurgerFi brand by $17.5 million and the carrying value of goodwill for the Anthony's brand by $37.7 million. The non-cash impairment loss is included in the unaudited condensed consolidated statement of operations under the caption “goodwill impairment” for the nine months ended October 3, 2022.
The entire disclosure for goodwill.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef