Goodwill

9 Months Ended

Sep. 30, 2020

Goodwill [Abstract]

Goodwill

Note 4 – Goodwill 

The following table summarizes the changes in the Company’s goodwill, by business segment:

	Regulated Water		Regulated Natural Gas		Other		Consolidated
Balance at December 31, 2019	$	58,981	$	-	$	4,841	$	63,822
Goodwill acquired		2,596		2,267,310		-		2,269,906
Reclassification to utility plant acquisition adjustment		(101)		-		-		(101)
Balance at September 30, 2020	$	61,476	$	2,267,310	$	4,841	$	2,333,627

On March 16, 2020, the Company completed the Peoples Gas Acquisition, which resulted in goodwill of $2,267,310, subject to adjustment over the one year measurement period. Refer to Note 3 – Acquisitions for information about the goodwill attributed to our Regulated Natural Gas segment.

The reclassification of goodwill to utility plant acquisition adjustment results from a mechanism approved by the applicable utility commission. The mechanism provides for the transfer over time, and the recovery through customer rates, of goodwill associated with some acquisition upon achieving specific objectives.

Goodwill is not amortized but is tested for impairment annually, or more often, if circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. When testing goodwill for impairment, the Company may assess qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and entity specific events, for some or all of our reporting units to determine whether it’s more likely than not that the fair value of a reporting unit is less than its carrying amount. Alternatively, based on our assessment of the qualitative factors previously noted, we may perform a quantitative goodwill impairment test by determining the fair value of a reporting unit based on a discounted cash flow analysis. If we perform a quantitative test and determine that the fair value of a reporting unit is less than its carrying amount, we would record an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. The Company performed a quantitative assessment for its annual test of the goodwill attributable to its Regulated Water and Aqua Resources reporting units for impairment and a qualitative assessment for its Regulated Natural Gas business reporting unit as of July 31, 2020, and concluded that it is more likely than not that the fair value of each reporting unit, which has goodwill recorded, exceeded its carrying amount, indicating that none of the Company’s goodwill was impaired.