6. Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is subject to an impairment review at a reporting unit level, on an annual basis as of the end of fiscal July of each year, or when an event occurs or circumstances change that would indicate potential impairment.

During the first quarter of fiscal 2013, the Partnership adopted new accounting guidance related to goodwill impairment testing. Under the new guidance, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test.

Under the two-step impairment test, the Partnership assesses the carrying value of goodwill at a reporting unit level based on an estimate of the fair value of the respective reporting unit. Fair value of the reporting unit is estimated using discounted cash flow analyses taking into consideration estimated cash flows in a ten-year projection period and a terminal value calculation at the end of the projection period. If the fair value of the reporting unit exceeds its carrying value, the goodwill associated with the reporting unit is not considered to be impaired. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized to the extent that the carrying amount of the associated goodwill, if any, exceeds the implied fair value of the goodwill.

The carrying values of goodwill assigned to the Partnership’s operating segments are as follows:

	As of
	June 29,		September 29,
	2013		2012
Propane	$	1,075,091	$	1,075,091
Fuel oil and refined fuels		4,438		4,438
Natural gas and electricity		7,900		7,900
	$	1,087,429	$	1,087,429

The carrying values of goodwill assigned to the operating segments as of September 29, 2012 have been revised to reflect the final purchase price allocation from the Inergy Propane acquisition (see Note 3), which resulted in an increase of $5,820 and a decrease of $10,690 to goodwill assigned to the propane and fuel oil and refined fuels operating segments, respectively.