Note 7 - Goodwill

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Goodwill Disclosure [Text Block]

7. Goodwill

The Company assesses goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment on each reporting unit. The Company has two reporting units: the legacy Anika reporting unit, which specializes in therapies based on its hyaluronic acid, or HA, technology platform, and a joint preservation and restoration reporting unit established in 2020 upon the acquisitions of Parcus Medical and Arthrosurface.

Changes in the carrying value of goodwill for the three months ended March 31, 2021 and year ended December 31, 2020 were as follows:

	Three Months Ended March 31, 2021
Balance, beginning	$	8,413
Effect of foreign currency adjustments		(368	)
Acquisitions		-
Impairment loss		-
Balance, ending	$	8,045

The increase in goodwill in 2020 is related to the acquisitions of Parcus Medical and Arthrosurface Inc. in January and February 2020, as further discussed in Note 3, Business Combinations. The Company performed an interim quantitative assessment of goodwill impairment as March 31, 2020, in addition to its annual impairment testing as of November 30, 2020, with respect to the joint preservation and restoration reporting unit. The results of the impairment tests indicated that the estimated fair value of the reporting unit was less than its carrying value. This was primarily due to decreases in near term revenue and related cash flows as a result of the temporary suspension of domestic elective procedures which directly impact the reporting unit. Consequently, a non-cash goodwill impairment charge was recorded in the amount of $42.5 million during 2020. The Company did not record any goodwill impairment charge with respect to legacy Anika reporting unit in 2020.