Goodwill and Acquired Intangibles Goodwill and Acquired Intangibles

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles

Goodwill and Acquired Intangibles

In the first quarter of 2020, we adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard simplifies the quantitative impairment test from a two-step process to a one-step process. The quantitative test is performed by comparing the carrying value of net assets to the estimated fair value of the related operations. If the fair value is determined to be less than carrying value, the shortfall up to the carrying value of the goodwill represents the amount of goodwill impairment. The standard continues to permit a company to test goodwill for impairment by performing a qualitative assessment or using the quantitative test.

We completed our annual assessment of goodwill as of April 1, 2020 and determined that the fair value of each reporting unit exceeded its corresponding carrying value and that there is no impairment of goodwill.

The COVID-19 pandemic continues to impact our Commercial Airplanes and Commercial Services businesses. Therefore, we believe the COVID-19 pandemic is a triggering event in the second quarter of 2020 for testing whether goodwill recorded by our Commercial Airplanes and Commercial Services reporting units is impaired. At June 30, 2020, Commercial Airplanes has $1,315 of goodwill and Commercial Services has $3,056. We performed a qualitative assessment and determined it is not more likely than not that the fair values of our Commercial Airplane and Commercial Services reporting units were less than their carrying values as of June 30, 2020. We will continue to monitor the impacts of the COVID-19 pandemic in future quarters. Changes in our forecasts or further decreases in the value of our common stock could cause book values to exceed fair values which may result in goodwill impairment charges in future periods.