INTANGIBLE ASSETS, GOODWILL AND LONG-LIVED ASSETS

12 Months Ended

Jul. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, GOODWILL AND LONG-LIVED ASSETS

7. INTANGIBLE ASSETS, GOODWILL AND LONG-LIVED ASSETS

The components of amortizable intangible assets are as follows:


		July 31, 2017				July 31, 2016
	Weighted-Average Remaining Life in Years at July 31, 2017	Cost		Accumulated Amortization		Cost		Accumulated Amortization
Dealer networks/customer relationships	16	$	404,960	$	101,795	$	404,960	$	55,191
Trademarks	18		147,617		17,570		148,117		10,539
Design technology and other intangibles	8		19,300		9,203		22,400		10,870
Non-compete agreements	2		450		293		450		203
Backlog	–		–		–		12,400		4,133

Total amortizable intangible assets		$	572,327	$	128,861	$	588,327	$	80,936

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 amortization expense for future years is as follows:


For the fiscal year ending July 31, 2018	$	53,968
For the fiscal year ending July 31, 2019		50,136
For the fiscal year ending July 31, 2020		46,269
For the fiscal year ending July 31, 2021		42,935
For the fiscal year ending July 31, 2022		37,828
For the fiscal year ending July 31, 2023 and thereafter		212,330

	$	443,466

During the second quarter of fiscal 2016, the Company determined that sufficient evidence existed 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 in the second quarter of fiscal 2016 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 and discussed in Note 9 to the Consolidated Financial Statements. The $9,113 charge represents the full impairment of the goodwill related to this reporting unit.

Historically, the Company completed its annual impairment test as of April 30. During the fourth quarter of the fiscal year ended July 31, 2017, the Company changed the date of its annual impairment test to May 31. This change did not result in any delay, acceleration or avoidance of impairment. The Company completed its annual impairment test as of April 30, 2017, and then performed an additional impairment test as of May 31, 2017 in connection with the change. No impairment of goodwill was identified as of either April 30, 2017 or May 31, 2017. The Company believes May 31 is a preferable test date because it will allow the Company to consider certain industry forecasts and other relevant external information important to the financial forecasting process that are not available as of the April 30 date. Furthermore, the May 31 date will allow additional time to complete the impairment testing and estimate the implied fair value of goodwill for comparison with the carrying value, should that be necessary, because the testing will occur earlier within a quarterly reporting cycle. This change was applied prospectively beginning May 31, 2017. Retrospective application to prior periods is impracticable as the Company is unable to objectively determine, without the use of hindsight, the assumptions that would have been used in those earlier periods.

The Company’s reporting units are generally the same as its operating segments, which are identified in Note 4 to the 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 and discussed in Note 9 to the Consolidated Financial Statements. 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.

Changes in the carrying amount of goodwill by reportable segment as of July 31, 2017 and 2016 are summarized as follows:


	Towables			Motorized		Other		Total
Net balance as of July 31, 2015	$	269,751		$	–	$	42,871	$	312,622

Fiscal year 2016 activity:
Goodwill acquired		74,184			–		–		74,184
Impairment charges		(9,113	)		–		–		(9,113	)

Net balance as of July 31, 2016	$	334,822		$	–	$	42,871	$	377,693


Fiscal year 2017 activity:
No activity		–			–		–		–

Net balance as of July 31, 2017	$	334,822		$	–	$	42,871	$	377,693

The components of the net balance as of July 31, 2017 are summarized as follows:



	Towables			Motorized			Other		Total
Goodwill	$	343,935		$	17,252		$	42,871	$	404,058
Accumulated impairment charges		(9,113	)		(17,252	)		–		(26,365	)

Net balance as of July 31, 2017	$	334,822		$	–		$	42,871	$	377,693

- 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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