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Goodwill
 12 Months Ended
Jan. 02, 2021
Goodwill Goodwill
 
As of January 2, 2021, the Company had 11 reporting units with goodwill for which the annual goodwill impairment test was completed. We perform the annual impairment test on the first day of the fourth quarter each year. We initially perform a qualitative analysis. As a result of this analysis, it was determined that it is more likely than not that the fair value of seven reporting units were greater than its carrying value. For the remaining reporting units we perform a two-step quantitative analysis. Step 1 of that analysis compares the estimated the fair value of the reporting units using an income approach (i.e., a discounted cash flow technique) and a market approach to the carrying value of the reporting unit. If the estimated fair value exceeds its carrying value, the goodwill of the reporting unit is not considered impaired. If the carrying value of the reporting unit exceeds its fair value, we proceed to the second step to measure the amount of potential impairment loss. Based on this analysis, it was determined that the reporting units’ fair values were greater than their carrying values and no impairment charges were recognized in 2020. The accumulated impairment charges recognized in periods prior to 2018 totaled $68.2 million.
 
These estimates of a reporting unit’s fair value involve significant management estimates and assumptions, including but not limited to sales prices of similar assets, assumptions related to future profitability, cash flows, and discount rates. These estimates are based upon historical trends, management’s knowledge and experience and overall economic factors, including projections of future earnings potential. Developing discounted future cash flow estimates in applying the income approach required management to evaluate its intermediate to longer-term strategies, including, but not limited to, estimates about revenue growth, operating margins, capital requirements, inflation and working capital management. The development of
appropriate rates to discount the estimated future cash flows required the selection of risk premiums, which can materially affect the present value of estimated future cash flows.
 
The following table presents goodwill by reportable segments and in total:
 
 WestEastCementTotal
Balance—December 29, 2018$580,567 $406,805 $204,656 $1,192,028 
Acquisitions1,657 3,621 — 5,278 
Foreign currency translation adjustments2,393 — — 2,393 
Balance—December 28, 2019$584,617 $410,426 $204,656 $1,199,699 
Acquisitions (1)19 — — 19 
Foreign currency translation adjustments1,573 — — 1,573 
Balance—January 2, 2021$586,209 $410,426 $204,656 $1,201,291 
______________________
(1)Reflects goodwill from 2020 acquisitions and working capital adjustments from prior year acquisitions.
Summit Materials, LLC  
Goodwill Goodwill
 
As of January 2, 2021, the Company had 11 reporting units with goodwill for which the annual goodwill impairment test was completed. We perform the annual impairment test on the first day of the fourth quarter each year. We initially perform a qualitative analysis. As a result of this analysis, it was determined that it is more likely than not that the fair value of seven reporting units were greater than its carrying value. For the remaining reporting units we perform a two-step quantitative analysis. Step 1 of that analysis compares the estimated the fair value of the reporting units using an income approach (i.e., a discounted cash flow technique) and a market approach to the carrying value of the reporting unit. If the estimated fair value
exceeds its carrying value, the goodwill of the reporting unit is not considered impaired. If the carrying value of the reporting unit exceeds its fair value, we proceed to the second step to measure the amount of potential impairment loss. Based on this analysis, it was determined that the reporting units’ fair values were greater than their carrying values and no impairment charges were recognized in 2020. The accumulated impairment charges recognized in periods prior to 2018 totaled $68.2 million.

These estimates of a reporting unit’s fair value involve significant management estimates and assumptions, including but not limited to sales prices of similar assets, assumptions related to future profitability, cash flows, and discount rates. These estimates are based upon historical trends, management’s knowledge and experience and overall economic factors, including projections of future earnings potential. Developing discounted future cash flow estimates in applying the income approach required management to evaluate its intermediate to longer-term strategies, including, but not limited to, estimates about revenue growth, operating margins, capital requirements, inflation and working capital management. The development of appropriate rates to discount the estimated future cash flows required the selection of risk premiums, which can materially affect the present value of estimated future cash flows.
 
The following table presents goodwill by reportable segments and in total:
 WestEastCementTotal
Balance—December 29, 2018$581,567 $406,805 $204,656 $1,193,028 
Acquisitions1,657 3,621 — 5,278 
Foreign currency translation adjustments2,393 — — 2,393 
Balance—December 28, 2019$585,617 $410,426 $204,656 $1,200,699 
Acquisitions (1)19 — — 19 
Foreign currency translation adjustments1,573 — — 1,573 
Balance—January 2, 2021$587,209 $410,426 $204,656 $1,202,291 
______________________
(1)Reflects goodwill from 2020 acquisitions and working capital adjustments from prior year acquisitions.