GOODWILL

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL Goodwill represents the excess of purchase price over the estimated fair value of identifiable net assets acquired in a business combination. The Company tests goodwill for recoverability each annual reporting period at December 31

and at interim periods if facts or circumstances are indicative of potential impairment. See Note 2 for information on the Company’s change in fair value measurement methodology for testing goodwill impairment.

The carrying value of goodwill from the Company’s Investment Management and Research reporting unit totaled $4.6 billion at both September 30, 2020 and December 31, 2019, resulting primarily from its investment in AB as well as direct strategic acquisitions of AB, including its purchase of Sanford C. Bernstein, Inc.

For purpose of testing this goodwill for impairment, the Company has historically applied a discounted cash flow valuation technique to measure the fair value of the reporting unit, sourcing the underlying cash flows and assumptions from AB’s current business plan projections and adjusting the result to reflect the noncontrolling interest in AB as well as incremental taxes at the Company level as related to the form and structure of its investment in AB. During the first quarter of 2020, the unit price of AB declined significantly in response to the precipitous decline in the financial markets. As such, the Company performed an interim impairment evaluation of goodwill utilizing the discounted cash flow valuation technique and considered the results along with a number of other factors (including current market conditions) and determined that the fair value of the reporting unit exceeded its carrying value at March 31, 2020. As such, no goodwill impairment existed. The Company will continue to monitor and evaluate any events that may indicate an impairment of goodwill.