Goodwill and intangible assets

9 Months Ended

Sep. 26, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

The components of goodwill and other intangible assets are as follows:

Goodwill:


	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Balance as of December 31, 2019
Goodwill	$	1,583,576	874,198	1,439,678	3,897,452
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,051,646		531,144	987,237	2,570,027

Goodwill recognized during the period	—		—	(9,642)	(9,642)
Currency translation during the period	(17,997)		—	32,253	14,256

Balance as of September 26, 2020
Goodwill	1,565,579		874,198	1,462,289	3,902,066
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	$	1,033,649	531,144	1,009,848	2,574,641

Intangible assets not subject to amortization:


	Tradenames
Balance as of December 31, 2019	$	702,732


Currency translation during the period	(4,166)
Balance as of September 26, 2020	$	698,566

Intangible assets subject to amortization:


Gross carrying amounts:	Customer relationships		Patents	Other	Total
Balance as of December 31, 2019	$	645,206	249,100	6,631	900,937
Intangible assets recognized during the period	12,789		—	—	12,789
Currency translation during the period	12,622		9,548	(27)	22,143
Balance as of September 26, 2020	$	670,617	258,648	6,604	935,869

Accumulated amortization:	Customer relationships		Patents	Other	Total
Balance as of December 31, 2019	$	426,765	246,872	1,153	674,790
Amortization during the period	19,531		1,595	57	21,183
Currency translation during the period	10,173		9,495	16	19,684
Balance as of September 26, 2020	$	456,469	257,962	1,226	715,657

Intangible assets subject to amortization, net	$	214,148	686	5,378	220,212


	Three Months Ended			Nine Months Ended
	September 26, 2020		September 28, 2019	September 26, 2020	September 28, 2019
Amortization expense	$	7,327	6,912	21,183	20,596

Mohawk performs its annual testing of goodwill and indefinite lived intangibles in the fourth quarter of each year and no impairment was indicated for 2019. In 2019 the Company also concluded that in general, a decline in estimated after tax cash flows greater than approximately 19% to 39% or an increase of approximately 15% to 45% in WACC or a significant or prolonged decline in market capitalization could result in an additional indication of impairment.

As a result of the economic impact from COVID-19, the Company performed a qualitative assessment of whether the fair value of any of its reporting units or indefinite-lived intangible assets was more likely than not less than its carrying amount at March 28, 2020. The Company concluded neither goodwill nor any of its indefinite-lived intangible assets were impaired at March 28, 2020. There were no factors or changes in circumstances to indicate a change to this assessment was required during the three month periods ended June 27, 2020 and September 26, 2020. However, while we have concluded that neither goodwill nor any of its indefinite-lived intangible assets were impaired during the quarter ended September 26, 2020, a prolonged pandemic could impact the Company’s assumptions utilized in the determination of the estimated fair values of the Company’s reporting units and indefinite-lived intangible assets significantly enough to trigger an impairment. Hence, the Company continues to monitor the economic impact of COVID-19 and may be required to reassess impairment of goodwill or indefinite-lived intangible assets in future interim periods.