LONG-LIVED ASSET IMPAIRMENT -WOOD TREATMENT

12 Months Ended

Sep. 30, 2020

Long-Lived Asset Impairment [Abstract]

LONG-LIVED ASSET IMPAIRMENT -WOOD TREATMENT

LONG-LIVED ASSET IMPAIRMENT - WOOD TREATMENT

As a result of to the previously announced planned closure of the Company's wood treatment business' facilities by approximately the end of calendar year 2021, the Company recognized non-cash pre-tax impairment charges in the Performance Materials segment of $2,314 and $67,372, for the years ending September 30, 2020 and 2019, respectively, for the wood treatment asset group which is also a reporting unit, and adjusted the remaining useful lives such that they do not extend beyond the announced plant closures. The Company recognized a tax benefit of $608 and $17,072, for the years ending September 30, 2020 and 2019, respectively in Provision for income taxes in the Consolidated Statements of Income.

The Company tested the recoverability of its long-lived assets and determined the carrying amount of the assets exceeded the sum of the expected undiscounted future cash flows. The resulting impairment charge of $2,314 was recorded to reduce the carrying values of these assets to fair value and was allocated as follows:

	September 30,
	2020		2019
Property, plant, and equipment, net	$	450	$	4,063
Other intangible assets – Product technology	343		9,651
Other intangible assets – Acquired patents and licenses	102		1,689
Other intangible assets – Customer relationships, distribution rights, and other	1,419		51,969
Total	$	2,314	$	67,372

Testing the assets for recoverability involves developing estimates of future cash flows directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of the assets. As the inputs for testing recoverability, including estimates of revenue and expenses, not generally observable in active markets, the Company considers such measurements to be Level 3 measurements in the fair value hierarchy. The duration of the revenue and expense estimates are limited to the period through the closure date.

The fair value of the wood treatment asset group was sufficient such that the recognized impairment was limited to long-lived assets and the reporting unit goodwill was not impaired, however, as the Company approaches the closure date of the facilities and there are lower estimated future cash flows, the carrying value of the wood treatment asset group and reporting unit will not be recoverable, resulting in future impairments. The remaining carrying value of the wood treatment business as of September 30, 2020 includes $35.0 million and $3.8 million of goodwill and intangible assets, respectively, which we anticipate will be periodically impaired through the closure date, resulting in no fair value ascribed to the wood treatment business by the date of closure. The amount of the periodic impairments will vary depending on the timing of the remaining future cash flows of the business.