Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Goodwill and Other Intangibles

Goodwill is allocated to various reporting units, which are at the operating segment level, for the purpose of evaluating whether goodwill is impaired. Mattel’s reporting units are: (i) North America, (ii) International, and (iii) American Girl. Components of the operating segments have been aggregated into a single reporting unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the products, the nature of the production processes, the customers, and the manner in which the products are distributed.

The change in the carrying amount of goodwill by operating segment for 2021 and 2020 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America operating segment selling those brands, thereby causing a foreign currency translation impact. During the first quarter of 2021, Mattel sold its arts, crafts, and stationery business, resulting in a reduction of goodwill of approximately $2 million.

	North America		International		American Girl		Total
	(In thousands)
Balance at December 31, 2019	$	732,430	$	450,713	$	207,571	$	1,390,714
Currency exchange rate impact	971		2,149		—		3,120
Balance at December 31, 2020	733,401		452,862		207,571		1,393,834
Dispositions	(1,290)		(1,056)		—		(2,346)
Currency exchange rate impact	(322)		(959)		—		(1,281)
Balance at December 31, 2021	$	731,789	$	450,847	$	207,571	$	1,390,207

In the third quarter of 2021, Mattel performed a qualitative assessment to determine whether it was more likely than not that the book value of each reporting unit exceeded its fair value. As a result of Mattel's qualitative assessment, it was determined that goodwill was not impaired. There were no events or changes in circumstances subsequent to the third quarter assessment that indicate that the carrying value of a reporting unit may exceed its fair value as of December 31, 2021.

Other Intangibles

Identifiable intangibles were $476.9 million, net of accumulated amortization of $327.0 million, and $518.2 million, net of accumulated amortization of $286.9 million, as of December 31, 2021 and 2020, respectively. The estimated future amortization expense for the next five years is as follows:

	Amortization Expense
	(In thousands)
2022	$	38,503
2023	39,250
2024	33,074
2025	33,012
2026	29,612

Mattel tests its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Mattel's amortizable intangible assets primarily consist of trademarks. During the fourth quarter of 2021, Mattel discontinued the use of an intangible asset which resulted in an asset impairment charge of $2.0 million. During 2020 and 2019, Mattel's amortizable intangible assets were not impaired.