10. Goodwill and Identifiable Intangible Assets

Goodwill

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



(in millions)	ACCO Brands North America			ACCO Brands EMEA			ACCO Brands International			Total
(in millions)	ACCO Brands North America			ACCO Brands EMEA			ACCO Brands International			Total
Balance at December 31, 2016	$	380.7		$	39.5		$	166.9		$	587.1
Esselte Acquisition	(5.1		)	113.2			(1.6		)	106.5
Foreign currency translation	—			(23.3		)	—			(23.3		)
Balance at December 31, 2017	$	375.6		$	129.4		$	165.3		$	670.3
GOBA Acquisition	—			—			2.4			2.4
Foreign currency translation	—			36.2			—			36.2
Balance at December 31, 2018	$	375.6		$	165.6		$	167.7		$	708.9

The goodwill balance includes $215.1 million of accumulated impairment losses, which occurred prior to December 31, 2016.

Goodwill has been recorded on our Consolidated Balance Sheet related to the Esselte Acquisition and represents the excess of the cost of the Esselte Acquisition when compared to the fair value estimate of the net assets acquired on January 31, 2017 (the date of the Esselte Acquisition). Goodwill has been recorded on our Consolidated Balance Sheet related to the GOBA Acquisition and represents the excess of the cost of the GOBA Acquisition when compared to the fair value estimate of the net assets acquired on July 2, 2018 (the date of the GOBA Acquisition). See "Note 3. Acquisitions" for details on the calculation of the goodwill acquired in the acquisitions.

The authoritative guidance on goodwill and other intangible assets requires that goodwill be tested for impairment at a reporting unit level. We have determined that our reporting units are ACCO Brands North America, ACCO Brands EMEA and ACCO Brands International. 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 2018 and concluded that no impairment existed.

A considerable amount of management judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of each reporting unit and the indefinite lived intangible assets. While we believe our judgments and assumptions are reasonable, different assumptions could change the estimated fair values and, therefore, impairment charges could be required. Significant negative industry or economic trends, disruptions to our business, loss of significant customers, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in the use of the assets or in entity structure, and divestitures may adversely impact the assumptions used in the valuations and ultimately result in future impairment charges.

Identifiable Intangibles

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 2018 and concluded that no impairment existed. For one of our indefinite-lived trade names that was not substantially above its carrying value, Mead^®, we performed a quantitative test in the second quarter of 2018. A 1.5% long-term growth and an 11.5% discount rate were used. We concluded that the Mead^®trade name was not impaired.

As of June 30, 2018, we changed the indefinite-lived Mead^® trade name to an amortizable intangible asset. The change was made as a result of decisions regarding the Company's future use of the trade name. The Company began amortizing the Mead^® trade name on a straight-line basis over a life of 30 years on July 1, 2018.

Acquired Identifiable Intangibles

GOBA Acquisition

The valuation of identifiable intangible assets of $10.3 million acquired in the GOBA Acquisition include an amortizable trade name and amortizable customer relationships, which have been recorded at their estimated fair values. The fair value of the trade name was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of the projected after-tax cash flows.

The amortizable trade name is expected to be amortized over 15 years on a straight-line basis, while the customer relationships will be amortized on an accelerated basis over 10 years, from July 2, 2018 the date GOBA was acquired by the Company. The allocations of the acquired identifiable intangibles acquired in the GOBA Acquisition were as follows:



(in millions)	Fair Value		Remaining Useful Life Ranges
Trade name - amortizable	$	3.8	15 years
Customer relationships	6.5		10 years
Total identifiable intangibles acquired	$	10.3

Esselte Acquisition

The identifiable intangible assets of $277.0 million acquired in the Esselte Acquisition include amortizable customer relationships, indefinite lived and amortizable trade names and patents, which have been recorded at their estimated fair values. The fair value of the trade names and patents was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The fair value of the customer relationships was determined using the multi-period excess earnings method, which is based on the present value of the projected after-tax cash flows.

Amortizable customer relationships, trade names and patents are expected to be amortized over lives ranging from 10 to 30 years from the Esselte Acquisition date of January 31, 2017. The customer relationships will be amortized on an accelerated basis. The allocations of the acquired identifiable intangibles acquired in the Esselte Acquisition were as follows:



(in millions)	Fair Value		Remaining Useful Life Ranges
Trade name - indefinite lived	$	116.8	Indefinite
Trade names - amortizable	53.2		15-30 Years
Customer relationships	102.4		15 Years
Patents	4.6		10 Years
Total identifiable intangibles acquired	$	277.0

PA Acquisition

The identifiable intangible assets of $58.0 million acquired in the PA Acquisition include amortizable customer relationships and trade names and were recorded at their estimated fair values. The values assigned were based on the estimated future discounted cash flows attributable to the assets. These future cash flows were estimated based on the historical cash flows and then adjusted for anticipated future changes, primarily expected changes in sales volume or price.

Amortizable customer relationships and trade names are being amortized over lives ranging from 12 to 30 years from the PA Acquisition date of May 2, 2016. The customer relationships are being amortized on an accelerated basis. The allocations of the identifiable intangibles acquired in the PA Acquisition were as follows:



(in millions)	Fair Value		Remaining Useful Life Ranges
Trade names - amortizable	$	22.0	12-30 Years
Customer relationships	36.0		12 Years
Total identifiable intangibles acquired	$	58.0

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



	December 31, 2018								December 31, 2017
(in millions)	Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names	$	471.7	$	(44.5	)	⁽¹⁾	$	427.2	$	599.5	$	(44.5	)	⁽¹⁾	$	555.0
Amortizable intangible assets:
Trade names	306.0		(70.5		)		235.5		195.3		(59.4		)		135.9
Customer and contractual relationships	240.2		(120.5		)		119.7		243.0		(99.3		)		143.7
Patents	5.5		(0.9		)		4.6		5.8		(0.5		)		5.3
Subtotal	551.7		(191.9		)		359.8		444.1		(159.2		)		284.9
Total identifiable intangibles	$	1,023.4	$	(236.4	)		$	787.0	$	1,043.6	$	(203.7	)		$	839.9


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

The Company’s intangible amortization was $36.7 million, $35.6 million and $21.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Estimated amortization expense for amortizable intangible assets for the next five years is as follows:



(in millions)	2019		2020		2021		2022		2023
Estimated amortization expense⁽²⁾	$	34.9	$	31.4	$	27.8	$	24.3	$	22.1


(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.