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Impairment
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Impairment
Impairment

The Company performs its annual impairment test during the fourth quarter, after the annual budgeting process is completed as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Each interim period, management assesses whether or not an indicator of impairment is present that would necessitate that impairment analysis be performed in an interim period other than during the fourth quarter.
During the Company’s annual impairment analysis during the fourth quarter of 2016, management used a discount rate of 15% and a terminal growth rate of 3%. The discount rate used in the discount cash flow method was based on a weighted-average cost of capital determined from relevant market comparisons, adjusted for specific reporting unit risks (i.e. primarily the uncertainty of achieving projected operating cash flows). The terminal value growth rate was applied to the final year of the projected period and reflected the Company's estimate of stable, perpetual growth.  The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”).
Due to the complexity and the effort required to estimate the fair value of the reporting units in the step one of the impairment test and to estimate the fair values of all assets and liabilities of the reporting units in the second step of the test, the fair value estimates were derived based on assumptions and analyses that are subject to change. Such assumptions include but are not limited to the following: changes in its cost of capital, growth of the reporting unit's revenue, cost structure of the reporting unit, successful completion of research and development and customer acceptance of new products, expected changes in emissions regulations and approval of the reporting unit's product by regulatory agencies. Based on the Company’s analyses, the implied fair value of goodwill was substantially lower than the carrying value of goodwill for its reporting unit.
As a result during the fourth quarter of 2016, the Company recognized, an impairment charge of $4.7 million. This impairment charge was included as a separate component of operating expenses for the year ended December 31, 2016. As a result, as of December 31, 2016, the Company had no goodwill on its consolidated balance sheet.