Note 8 - Goodwill

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Goodwill Disclosure [Text Block]

8. Goodwill:

The changes in the carrying amount of goodwill for year ended

December 31, 2020

and

2019

were as follows:

	2020		2019
Goodwill, balance at beginning of year	$	3,301,439	$	-
Acquisition of Kidoz Ltd. (Note 3)		-		17,178,824
Impairment of goodwill		-		(13,877,385	)
Goodwill, balance at end of year	$	3,301,439	$	3,301,439

The Company's annual goodwill impairment analysis performed during the

fourth

quarter of fiscal

2020

and

2019

included a quantitative analysis of the Kidoz Ltd. reporting unit (consisting of intangible assets (Note

7

) and goodwill). The reporting unit has a carrying amount of

$5,552,428

(

2019

-

$6,108,501

) as at

December 31, 2020.

The Company performed a discounted cash flow analysis for Kidoz Ltd. These discounted cash flow models included management assumptions for expected sales growth, margin expansion, operational leverage, capital expenditures, and overall operational forecasts. The Company classified these significant inputs and assumptions as Level

3

fair value measurements.  For fiscal

2019,

these analyses led to the conclusion that the fair value of these reporting units was less than their carrying values by an amount that exceeded the carrying value of goodwill. Accordingly, for the year ended

December 31, 2019,

the full carrying value of the goodwill was impaired by

$13,877,385.

Based on the annual impairment test described above there was

no

additional impairment determined for fiscal

2020.