Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

7. Goodwill and Intangible Assets

The following is a reconciliation of the beginning and ending balances of goodwill:

	December 31, 2017			January 1, 2017
Goodwill
United States(a)	$	170,026		$	172,441
Brazil		62,663			62,663
Foreign exchange impact(b)		(23,954	)		(30,672	)
Balance, beginning of year		208,735			204,432
Foreign exchange impact		(444	)		6,718
Balance, end of year	$	208,291		$	211,150

(a)	Goodwill attributed to the United States was corrected for an error in the accounting for a prior period business acquisition. See Note 2.

(b)	Cumulative foreign exchange impact.

The Company regularly evaluates whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill. The Company performs its annual goodwill impairment review during its fiscal fourth quarter. The Company’s last annual review indicated that there was no impairment of goodwill, and that the reporting units had estimated fair values that were in excess of their carrying values, including goodwill. There have been no impairments to goodwill recognized.

Intangible assets include the following:

	December 31, 2017					January 1, 2017
	Gross Amount			Accumulated Amortization		Gross Amount			Accumulated Amortization
Non-compete agreements (definite-lived):
United States	$	—		$	—	$	1,100		$	(972	)
Brazil		—			—		400			(353	)
Foreign exchange impact(a)		—			—		(152	)		134
Non-compete agreements, net	$	—		$	—	$	1,348		$	(1,191	)
Trade name (indefinite-lived):
United States		77,200					77,200
Brazil		30,100					30,100
Foreign exchange impact(a)		(11,719	)				(11,506	)
Trade name		95,581			—		95,794			—
Total	$	95,581		$	—	$	97,142		$	(1,191	)

(a)	Cumulative foreign exchange impact.

Amortization expense for definite-lived intangibles was $158, $266 and $270 for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. The term of the non-compete agreements were completed during 2017.

Goodwill and intangible assets of the Company’s Brazilian reporting unit are denominated in the Brazilian Real. These assets are translated into US dollars at the rate of exchange as of the applicable balance sheet date. As a result, the US dollar value of goodwill and intangibles is impacted by the fluctuation in the exchange rate.

- 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.

+ References + Details

Fogo de Chao, Inc. 10-K