Note 5 - Goodwill and Other Intangible Assets, Net

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5.

   

GOODWILL AND OTHER INTANGIBLE ASSETS

Impairment testing

U.S. GAAP requires that both indefinite-lived intangible assets and goodwill are tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than

not

(i.e., a likelihood greater than

50%

) that the intangible asset or the reporting unit is impaired. During interim periods, ASC

350

requires companies to focus on those events and circumstances that affect the significant inputs used to determine the fair value of the asset group or reporting unit to determine whether an interim quantitative impairment test is requires.

The Company performed its annual impairment test for goodwill and intangible assets as of the last day of the

fourth

quarter. The Company

first

assessed certain qualitative factors to determine whether it is more likely than

not

that the fair value of a reporting unit or indefinite-lived intangible assets is less than its carrying amount, ad whether it is therefore necessary to perform the quantitative impairment test. For the aerospace reporting unit, the Company performed a quantitative impairment test, including a discounted cash flow model and peer comparison. As a result of the impairment testing, it was determined that

no

indefinite-lived intangible assets or goodwill was impaired.

Intangible assets relate to the purchase of businesses. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is

not

amortized, but is reviewed on an annual basis for impairment. Amortization of other intangible assets is calculated on a straight-line basis over periods ranging from

one

year to

15

years. Intangible assets consist of the following:

	December 31, 2020		December 31, 2019
Customer Intangibles	$	7,700,000	$	4,970,000
Non-Compete Agreements		200,000		200,000
Trademarks		1,930,000		340,000
Total Other Intangibles		9,830,000		5,510,000
Less: Accumulated Amortization		2,271,691		1,559,162
Other Intangibles, Net	$	7,558,309	$	3,950,838

Intangible amortization expense was as follows:

	December 31, 2020		December 31, 2019
Accumulated amortization at the beginning of the period	$	1,559,162	$	1,177,798
Amortization expense		712,529		381,364
Accumulated amortization at end of period	$	2,271,691	$	1,559,162

Intangible amortization for the next

five

years is as follows:

	Amortization in future periods
2021		712,530
2022		689,197
2023		672,530
2024		672,530
2025		672,530