Goodwill and Other Intangible Assets

6 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The Company’s goodwill and other intangible assets are summarized as follows:



	Goodwill		Other Intangible Assets, Net
Balance at March 31, 2016	$	127,934	$	83,026
Amortization expense	—		(4,135		)
Changes in foreign currency exchange rates	—		(151		)
Balance at September 30, 2016	$	127,934	$	78,740

The Company’s goodwill by segment is summarized as follows:



	September 30, 2016		March 31, 2016
UGG brand	$	6,101	$	6,101
Sanuk brand	113,944		113,944
Other brands	7,889		7,889
Total	$	127,934	$	127,934

Goodwill is initially recorded as the excess of the purchase price over the fair value of the brand or other assets acquired in a business combination. Consistent with the applicable accounting guidance, goodwill is subsequently tested annually for impairment. If, as of the time of conducting the impairment test, it is determined that the value of the brand, as determined by reference to product sales, operating margins or other indicators of value associated with the brand, has declined to a point that the fair value of the brand is below the carrying amount of goodwill for the brand, the Company may be required to write down the amount of goodwill (i.e. take an impairment charge). The Company evaluates Sanuk goodwill and Teva trademarks for impairment at October 31 of each year, and evaluates UGG and the other brands’ goodwill for impairment at December 31 of each year. The Company also performs interim evaluations of goodwill impairment if events or changes in circumstances between annual tests suggest additional testing may be warranted to determine if goodwill may be impaired.

The assessment of goodwill impairment involves valuing the Company’s various reporting units that carry goodwill, which are currently the same as the Company’s operating segments. As noted in the table above, most of the Company’s goodwill is related to the Sanuk wholesale reportable segment, with the remaining goodwill related to the UGG and other brands wholesale reportable segments.

Based on an assessment of relevant qualitative factors as required by the applicable accounting guidance, the Company determined that it was not required to conduct an interim evaluation of goodwill and intangible assets impairment as of September 30, 2016. While the October 31 impairment analysis is still in the early stages in conjunction with the Company's review of the long-term strategic plan for the Sanuk operating segment, it is possible that the annual analysis of Sanuk goodwill could result in an impairment charge.

The test for impairment involves the use of estimates and assumptions related to the fair value of the brands with which goodwill is associated. For purposes of testing goodwill impairment, the Company uses the same estimates that it uses to manage its business, including future sales and operating results, and other factors that could affect fair value or otherwise indicate potential impairment. The Company also considers the brands’ ability to generate income from operations and positive cash flow in future periods, as well as changes in consumer demand or acceptance of the brand’s products. The fair value determination could change materially if different estimates and assumptions were used. Furthermore, the estimates and assumptions used to calculate the fair value of a brand may change from period to period based upon a number of factors, including actual operating results, declining market conditions, changes in the retail environment, and increased competition, and are subject to a high degree of uncertainty. Changes in estimates and assumptions used to determine whether impairment exists, or changes in actual results compared to expected results, could result in impairment charges in future periods.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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