Intangible Assets and Goodwill

6 Months Ended

Jan. 31, 2016

8.	Intangible Assets and Goodwill

The components of amortizable intangible assets are as follows:


	Weighted-Average Remaining Life in Years at January 31, 2016	January 31, 2016				July 31, 2015
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Dealer networks/customer relationships	9	$	143,860	$	46,300	$	143,860	$	37,194
Trademarks	18		55,282		8,880		55,282		7,608
Design technology and other intangibles	9		22,400		9,518		22,400		8,168
Non-compete agreements	3		450		158		4,710		4,264

Total amortizable intangible assets		$	221,992	$	64,856	$	226,252	$	57,234

The dealer networks and customer relationships are being amortized on an accelerated basis. Trademarks, design technology and other intangibles and non-compete agreements are amortized on a straight-line basis.

Estimated annual amortization expense is as follows:


For the fiscal year ending July 31, 2016	$	23,440
For the fiscal year ending July 31, 2017		20,671
For the fiscal year ending July 31, 2018		18,986
For the fiscal year ending July 31, 2019		16,975
For the fiscal year ending July 31, 2020		15,256
For the fiscal year ending July 31, 2021 and thereafter		73,690

	$	169,018

Goodwill is not subject to amortization, but instead is reviewed for impairment by applying a fair-value based test to the Company’s reporting units on an annual basis as of April 30, or more frequently if events or circumstances indicate a potential impairment. The Company’s reporting units are the same as its operating segments, which are identified in Note 4 to the Condensed Consolidated Financial Statements. Fair values are determined by a discounted cash flow model. These estimates are subject to significant management judgment, including the determination of many factors such as sales growth rates, gross margin patterns, cost growth rates, terminal value assumptions and discount rates, and therefore largely represent Level 3 inputs as defined by ASC 820. Changes in these estimates can have a significant impact on the determination of cash flows and fair value and could potentially result in future material impairments.

Of the recorded goodwill of $303,509 at January 31, 2016 and $312,622 at July 31, 2015, $260,638 and $269,751, respectively, resides in the towable recreational vehicle segment and $42,871 resides in the other non-reportable segment at both January 31, 2016 and July 31, 2015.

Based on recent and future forecasted operating results, the Company determined that sufficient evidence existed as of the second quarter of fiscal 2016 to warrant an interim goodwill impairment analysis for one of its reporting units. As a result of this analysis, the Company recorded a pre-tax, non-cash goodwill impairment charge of $9,113 related to this reporting unit within the towables reportable segment. For the purpose of this goodwill test, the fair value of the reporting unit was determined by employing a discounted cash flow model, which utilized Level 3 inputs as defined by ASC 820. The $9,113 charge represents the full impairment of the goodwill related to this reporting unit.

- 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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