Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets
The carrying amount of goodwill for all reporting segments as of March 31, 2020, 2019 and 2018 is as follows:
We consider the recent decline in our business, which management believes is attributable to lower oil prices as a result of the COVID-19 pandemic, to be an indicator of potential asset impairments in our reporting units. In the fourth quarter of fiscal 2020, we performed our annual goodwill and tangible impairment assessments including our indefinite life trademarks. We analyzed our reporting units utilizing the income approach, based on discounted future cash flows, which are derived from internal forecasts and economic expectations, and the market approach, based on market multiples of guideline public companies. The impairment test for indefinite life trademarks utilized a relief from royalty analysis based on the cash flow streams attributable to the Thermon trademark. Based on the goodwill and assets impairment assessment, the estimated fair value of our reporting units exceeded the carrying value. As such, there was no impairment of goodwill, assets or our indefinite life trademarks as of the respective reporting periods. The most significant inputs in the Company's impairment test are the projected financial information, the weighted average cost of capital and market multiples for similar transactions. If the overall economic conditions, energy market or factors specific to the Company deteriorate further, it could negatively impact the Company's future impairment tests. We will continue to monitor our reporting unit's goodwill and asset valuations and test for potential impairments until the overall market conditions improve.
Our total intangible assets at March 31, 2020, and 2019 consisted of the following:
Trademarks and certifications have indefinite lives with the exception of IPI and Unitemp trademarks, which have gross carrying amounts of $1,820 and $314, respectively, that are subject to amortization. The useful life of the trademarks amortized is estimated at 8 years. Developed technology, products, customer relationships and other intangible assets have estimated lives of 20 years, 10 years, 10 years and 6 years, respectively. The weighted average useful life for the group is 12 years. Customer relationships intangibles associated with THS, with a gross carrying amount of $58,722, have a useful life of 17 years. Portions of intangible assets are valued in foreign currencies; accordingly changes in indefinite life intangible assets at March 31, 2020 and 2019 were the result of foreign currency translation adjustments.
The Company recorded amortization expense of $17,773, $20,771, and $16,458 in fiscal 2020, fiscal 2019 and fiscal 2018, respectively for intangible assets. Annual amortization of intangible assets for the next five years and thereafter will approximate the following:
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