Note 5 - Goodwill and Other Intangible Assets, Net

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

For the identified reporting units, a Step 1 impairment test was performed as of December 31, 2020 using an income approach based on management’s determination of the prospective financial information, with consideration given to the existing uncertainty in the global economy and aerospace and defense industry, particularly the commercial sector. The results of this test indicated the fair value exceeded carrying value for all reporting units tested. As a result of the impairment testing performed as of December 31, 2020, no indefinite-lived intangible assets or goodwill was determined to be impaired. Management updated their assessment during the third quarter of fiscal 2021 and validated the assumptions used in the analyses performed as of December 31, 2020 and determined that the resulting conclusions remained appropriate as of September 30, 2021.

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. Intangibles are amortized on a straight-line basis over periods ranging from one year to 15 years. Intangible assets are as follows:

	September 30, 2021		December 31, 2020
Customer list intangibles	$	9,154,589	$	7,700,000
Non-compete agreements		200,000		200,000
Trademarks		3,120,500		1,930,000
Total intangible assets		12,475,089		9,830,000
Less: accumulated amortization		2,925,424		2,271,691
Intangible assets, net	$	9,549,665	$	7,558,309

Amortization of intangibles assets was: $186,784 and $175,715 for the three months ended September 30, 2021 and 2020, respectively, and $653,733 and $534,397 for the nine months ended September 30, 2021 and 2020, respectively.