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Goodwill and Other Intangible Assets
9 Months Ended
Oct. 01, 2016
Goodwill and Other Intangible Assets [Abstract]  
Goodwill and Other Intangible Assets
Note 3 – Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of a business acquired over the fair value of the related net assets at the date of acquisition. Goodwill is not amortized but rather tested for impairment at least annually.  Similarly, indefinite-lived intangible assets are not amortized, but rather tested for impairment at least annually.  These impairment tests must be performed more frequently whenever events or changes in circumstances indicate that the asset might be impaired. The Company's business segments (see Note 11) represent its reporting units for goodwill impairment testing purposes.

As a result of a review of recent financial results and outlook for the MOSFETs segment following the recent completion of the production transfers, Vishay determined that an interim indefinite-lived intangible asset impairment test was required for its Siliconix tradenames as of the end of the third fiscal quarter of 2016.

As a result of this analysis, the Company determined that its Siliconix tradenames, with a carrying value of $20,359, were impaired.  The Company recorded an impairment charge of $1,559 to write-down the tradenames to their fair value.  The tradenames are no longer considered indefinite-lived and the remaining value will be amortized over the 10 year estimated remaining useful life.

The fair value of indefinite-lived trademarks is measured as the discounted cash flow savings realized from owning such tradenames and not having to pay a royalty for their use.  The evaluation of the fair value of indefinite-lived trademarks requires us to make significant estimates and assumptions.  These estimates and assumptions primarily include, but are not limited to: the assumed market-royalty rate; the discount rate; terminal growth rates; and forecasts of revenue.

Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the fair value, whether an impairment is present, and the amount of the impairment charge, if applicable.

In light of a sustained decline in market capitalization for Vishay and its peer group companies, and other factors (including the cost reduction programs announced during the third fiscal quarter of 2015 as described in Note 3), Vishay determined that interim impairment tests were required as of the end of the third fiscal quarter of 2015.  The Company recorded impairment charges totaling $62,980 as a result of these tests.

The recorded impairment charges are noncash in nature and do not affect Vishay's liquidity, cash flows from operating activities, or debt covenants, and will not have a material impact on future operations.