Goodwill

During the year ended December 31, 2013, the Company completed the purchase price accounting associated with the 2012 acquisitions of Lorex and Traficon resulting in an increase of goodwill of $61.2 million which was retrospectively adjusted. Also during 2013, the Company recorded goodwill in connection with its acquisition of Marine and Remote Sensing Solutions, Ltd. ("MARSS") and the acquisition of certain tangible assets and intellectual property from DigitalOptics Corporation East ("DOC Charlotte"). See Note 18, "Business Acquisitions," for additional information.

The Company reviews its goodwill for impairment annually during the third quarter, or more frequently, if there is a triggering event. A two-step test is performed to assess goodwill for impairment. First, the fair value of the reporting unit is compared to its carrying value. If the fair value exceeds the carrying value, goodwill is not impaired and no further testing is required. The second step is performed if the carrying value exceeds the fair value. The implied fair value of the reporting unit’s goodwill must be determined and compared to the carrying value of the goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference will be recorded. In determining the fair value of the reporting units, the Company relied upon the Income Approach and the Market Approach. Under the Income Approach, the fair value of a business is based on the cash flows it can be expected to generate over its remaining life. The estimated cash flows are converted to their present value equivalent using an appropriate rate of return and are analyzed within the boundary of the overall market capitalization of the Company. Under the Market Approach, the fair value of the business is based on forecasted earnings multiplied by an average earnings multiplier of a group of the Company’s peers and compared to the net assets of each reporting unit.

During the third quarter of 2013, the Company completed its annual review of goodwill and determined that no impairment of its recorded goodwill was necessary. As of December 31, 2013, there had been no triggering events or indicators of impairment that would require an updated impairment review.

The carrying value of goodwill by reporting segment and the activity for the two year period ending December 31, 2013 is as follows (in thousands):



	Thermal Vision and Measurement		Raymarine		Surveillance		Detection		Integrated Systems		Total
Balance, December 31, 2011	$	251,187	$	98,364	$	90,501	$	38,162	$	20,129	$	498,343
Currency translation adjustments	2,039		2,380		316		—		—		4,735
Balance, December 31, 2012 (as originally reported)	253,226		100,744		90,817		38,162		20,129		503,078
Retrospective adjustments	61,228		—		—		—		—		61,228
Balance, December 31, 2012 (as adjusted)	314,454		100,744		90,817		38,162		20,129		564,306
Goodwill from acquisitions	2,401		—		—		—		2,463		4,864
Currency translation adjustments	4,669		1,684		77		—		101		6,531
Balance, December 31, 2013	$	321,524	$	102,428	$	90,894	$	38,162	$	22,693	$	575,701