Note 4—Goodwill and Intangible Assets

The changes in the carrying value of goodwill, by operating segment, were as follows:


	Adhesives, Sealants and Additives		Industrial Tapes		Corrosion Protection and Waterproofing		Consolidated
Balance at August 31, 2018	$	52,787	$	21,215	$	10,694	$	84,696
Loss on impairment of polyurethane dispersions business		(2,410)		—		—		(2,410)
Foreign currency translation adjustment		(287)		—		(13)		(300)
Balance at August 31, 2019	$	50,090	$	21,215	$	10,681	$	81,986
Foreign currency translation adjustment		397		—		19		416
Balance at August 31, 2020	$	50,487	$	21,215	$	10,700	$	82,402

The Company’s goodwill is allocated to each reporting unit based on the nature of the products manufactured by the respective business combinations that originally created the goodwill. The Company has identified a total of three reporting units, corresponding to its three reportable operating segments that are used to evaluate the possible impairment of goodwill. Goodwill impairment exists when the carrying amount of goodwill exceeds its fair value. Assessments of possible impairment of goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations. Additionally, testing for possible impairment of recorded goodwill and certain intangible asset balances is required annually. The amount and timing of any impairment charges based on these assessments require the estimation of future cash flows and the fair market value of the related assets based on management’s best estimates of certain key factors, including future selling prices and volumes; operating, raw material and energy costs; and various other projected operating and economic factors, including the anticipated future impact of the coronavirus disease 2019 (COVID-19) pandemic. When testing, fair values of the reporting units and the related implied fair values of their respective goodwill are established using discounted cash flows.

In fiscal 2017, we early adopted Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results. If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

During the three-month period ended February 28, 2019, the ordering patterns of the polyurethane dispersions reporting unit’s customers, especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019, indicated that an impairment in the carrying value of the reporting unit might have occurred. The Company performed an impairment test on the indefinite-lived and long-lived assets related to the polyurethane dispersions reporting unit, now part of the Adhesives, Sealants and Additives operating segment and reporting unit (part of the former Industrial Materials segment during the second fiscal quarter of 2019), in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019. The polyurethane dispersions reporting unit’s fair value was determined based on the income approach (discounted cash flow method).

The Company performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. For the annual fiscal 2020 goodwill impairment test, we performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that our reporting units' fair values exceeded their carrying values (i.e. indicated no impairment of goodwill). Accordingly, it was not necessary for us to perform the quantitative analysis.

As of August 31, 2020 and 2019, the Company had a total goodwill balance of $82,402 and $81,986, respectively, related to its acquisitions, of which $31,591 and $34,778, respectively, remained deductible for income taxes.

Intangible assets subject to amortization consisted of the following as of August 31, 2020 and 2019:


	Weighted Average		Gross Carrying		Accumulated		Net Carrying
	Amortization Period		Value		Amortization		Value
August 31, 2020
Patents and agreements	14.6	years	$	1,760	$	1,705	$	55
Formulas and technology	7.8	years		10,250		9,121		1,129
Trade names	5.8	years		8,575		7,781		794
Customer lists and relationships	9.1	years		98,966		59,744		39,222
			$	119,551	$	78,351	$	41,200

August 31, 2019
Patents and agreements	14.6	years	$	1,760	$	1,693	$	67
Formulas and technology	7.8	years		10,164		7,969		2,195
Trade names	5.8	years		8,503		7,261		1,242
Customer lists and relationships	9.1	years		98,139		48,939		49,200
			$	118,566	$	65,862	$	52,704

Aggregate amortization expense related to intangible assets for the years ended August 31, 2020, 2019 and 2018 was $11,576, $12,445 and $11,807, respectively. As of August 31, 2020 estimated amortization expense for the next five fiscal years is as follows:


Years ending August 31,
2021			11,066
2022			10,036
2023			6,768
2024			5,560
2025			3,961