Note 2 - Goodwill, Customer Relationships and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Text Block] |
Note
2 – Goodwill
, Customer Relationships
and Other Intangible Assets
Goodwill: Goodwill represents the excess of the purchase price over the fair value of net identifiable assets acquired in business combinations. The Company considers its wholly-owned subsidiaries, Crown Crafts Infant Products, Inc. (“CCIP”) and Hamco, Inc. (“Hamco”), to each be a reporting unit of the Company for the purpose of presenting and testing for the impairment of goodwill. The goodwill of the reporting units of the Company as of July 2, 2017 and July 3, 2016 amounted to $24.0 $22.9 $1.1 The Company
tests the fair value of the goodwill, if any, within its reporting units annually as of the
first day of the Company’s fiscal year. An additional interim impairment test is performed during the year whenever an event or change in circumstances occurs that suggests that the fair value of the goodwill of either of the reporting units of the Company has more likely than not (defined as having a likelihood of greater than
50% ) fallen below its carrying value. The annual or interim impairment test is performed by
first
assessing qualitative factors to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying amount. If such qualitative factors so indicate, then the impairment test is continued in a
two -step approach. The first step is the estimation of the fair value of each reporting unit to ensure that its fair value exceeds its carrying value. If step one indicates that a potential impairment exists, then the second step is performed to measure the amount of an impairment charge, if any. In the second step, these estimated fair values are used as the hypothetical purchase price for the reporting units, and an allocation of such hypothetical purchase price is made to the identifiable tangible and intangible assets and assigned liabilities of the reporting units. The impairment charge is calculated as the amount, if any, by which the carrying value of the goodwill exceeds the implied amount of goodwill that results from this hypothetical purchase price allocation.The annual impairment test of the fair value of the goodwill of the reporting units of the Company was performed as of April 3, 2017, and the Company concluded that the fair value of the goodwill of the Company’s reporting units substantially exceeded their carrying values as of that date.Other Intangible Assets: Other intangible assets at July 2, 2017 and July 3, 2016
consisted primarily of the fair value of identifiable assets acquired in business combinations
other than tangible assets and goodwill. The gross amount and accumulated amortization of the Company’s other intangible assets as of
July 2, 2017 and July 3, 2016
, the amortization expense for the
three -month periods ended July 2, 2017 and July 3, 2016 and the classification of such amortization expense within the accompanying unaudited condensed consolidated statements of income are as follows (in thousands):
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