Goodwill And Identifiable Intangibles

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

9. Goodwill and Identifiable Intangible Assets

Goodwill

As more fully described in the Company’s 2017 Annual Report on Form 10-K, we test goodwill for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. The Company performed this annual assessment, on a qualitative basis, as allowed by GAAP, in the second quarter of 2017 and concluded that no impairment existed.

Changes in the net carrying amount of goodwill by segment were as follows:



(in millions of dollars)	ACCO Brands North America		ACCO Brands EMEA			ACCO Brands International		Total
(in millions of dollars)	ACCO Brands North America		ACCO Brands EMEA			ACCO Brands International		Total
Balance at December 31, 2017	$	375.6	$	129.4		$	165.3	$	670.3
Translation	—		(2.4		)	—		(2.4		)
Balance at March 31, 2018	$	375.6	$	127.0		$	165.3	$	667.9

The goodwill balance is net of $215.1 million of accumulated impairment losses.

Identifiable Intangible Assets

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of March 31, 2018 and December 31, 2017 were as follows:



	March 31, 2018								December 31, 2017
(in millions of dollars)	Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names	$	603.1	$	(44.5	)	⁽¹⁾	$	558.6	$	599.5	$	(44.5	)	⁽¹⁾	$	555.0
Amortizable intangible assets:
Trade names	196.6		(62.1		)		134.5		195.3		(59.4		)		135.9
Customer and contractual relationships	245.4		(105.7		)		139.7		243.0		(99.3		)		143.7
Patents	5.9		(0.6		)		5.3		5.8		(0.5		)		5.3
Subtotal	447.9		(168.4		)		279.5		444.1		(159.2		)		284.9
Total identifiable intangibles	$	1,051.0	$	(212.9	)		$	838.1	$	1,043.6	$	(203.7	)		$	839.9


(1)	Accumulated amortization prior to the adoption of authoritative guidance on goodwill and indefinite-lived intangible assets, at which time further amortization ceased.

The Company’s intangible amortization expense was $9.3 million and $8.0 million for the three months ended March 31, 2018 and 2017, respectively.

Estimated amortization expense for amortizable intangible assets as of March 31, 2018 for the current year and the next five years are as follows:



(in millions of dollars)	2018		2019		2020		2021		2022		2023
Estimated amortization expense⁽²⁾	$	34.3	$	30.8	$	27.3	$	23.8	$	20.3	$	18.2


(2)	Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets and other events.

We test indefinite-lived intangibles for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. We performed this annual assessment, on a qualitative basis, as allowed by GAAP, for the majority of indefinite-lived trade names in the second quarter of 2017 and concluded that no impairment existed. For the Mead^® indefinite-lived trade name that is not substantially above its carrying values, we performed a quantitative test in the second quarter of 2017. A 1.5% long-term growth rate and a 10.5% discount rate were used. We concluded that the Mead^® trade name was not impaired. The fair value of the Mead^® trade name was less than 30% above its carrying value as of the second quarter of 2017 test. As of March 31, 2018, the carrying value of the Mead^® trade name was $113.3 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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