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Long-Lived Assets
 9 Months Ended
Sep. 27, 2020
Property, Plant and Equipment [Abstract]  
Long-Lived Assets Long-Lived Assets
Depreciation and Amortization Expense
We recognized depreciation expense of $10.5 million and $31.1 million in the three and nine months ended September 27, 2020, respectively. We recognized depreciation expense of $10.0 million and $30.0 million in the three and nine ended September 29, 2019, respectively.
We recognized amortization expense related to our intangible assets of $16.6 million and $49.6 million in the three and nine months ended September 27, 2020, respectively. We recognized amortization expense related to our intangible assets of $19.1 million and $56.5 million in the three and nine ended September 29, 2019, respectively.
Interim Impairment Test
Due to equity market conditions during the nine months ended September 27, 2020, we conducted an interim impairment test. We determined that the carrying values of our definite-lived assets were recoverable; therefore, we did not record any impairment charges related to these assets. Goodwill is tested for impairment at the reporting unit level, and we conducted a quantitative interim impairment test for one of our reporting units. A reporting unit is an operating segment, or a business unit one level below an operating segment if discrete financial information for that business is prepared and regularly reviewed by segment management. However, components within an operating segment are aggregated as a single reporting unit if they have similar economic characteristics. We determined that each of our reportable segments (Enterprise Solutions and Industrial Solutions) represents an operating segment. Within those operating segments, we have identified reporting units based on whether there is discrete financial information prepared that is regularly reviewed by segment management.
When we evaluate goodwill for impairment using a quantitative assessment, we compare the fair value of each reporting unit to its carrying value. We determine the fair value using an income approach. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows using growth rates and discount rates that are consistent with current market conditions in our industry. If the fair value of the reporting unit exceeds the carrying value of the net assets including goodwill assigned to that unit, goodwill is not impaired. If the carrying value of the reporting unit’s net assets including goodwill exceeds the fair value of the reporting unit, then we record an impairment charge based on that difference. In addition to the income approach, we calculate the fair value of our reporting units under a market approach. The market approach measures the fair value of a reporting unit through analysis of financial multiples of comparable businesses. Consideration is given to the financial conditions and operating performance of the reporting unit being valued relative to those publicly-traded companies operating in the same or similar lines of business. Significant judgment is required when applying the market approach as there is a range of financial multiples of comparable businesses.
Based on our interim goodwill impairment test, we determined that the fair value of the reporting unit was in excess of its carrying value by approximately 2%; therefore, we did not record any goodwill impairment. The significant assumptions used to estimate fair value included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending. To estimate the fair value, we used a 10.5% discount rate that reflected the economic conditions in effect at the time of the impairment test. We also considered assumptions that market participants may use. In our quantitative assessment, the 2020 to 2029 compounded annual revenue growth rate was 6.0% and the revenue growth rate beyond 2029 was 3.0%. By their nature, these assumptions involve risks and uncertainties. Furthermore, uncertainties associated with current market conditions increase the inherent risk associated with using an income approach to estimate fair values. While we have adjusted our key assumptions to reflect the current economic conditions, we have also assumed that economic conditions will improve beyond 2020. If current conditions persist and actual results are different from our estimates or assumptions, we may have to recognize an impairment charge that could be material.