Company: ST
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001477294-25-000022
Chunk: 126

Company: Sensata Technologies Holding plc
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 126
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 been material. However, should our judgments and estimates regarding variable consideration change, it could result in a material change to the amount of net revenue recognized in a period.

Goodwill

Businesses acquired are recognized at their fair value on the date of acquisition, with the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed recognized as goodwill. Intangible assets acquired may include either definite-lived or indefinite-lived intangible assets, or both. In accordance with FASB ASC Topic 350, Intangibles—Goodwill and Other, goodwill is not amortized. Instead, these assets are evaluated for impairment on an annual basis, and whenever events or business conditions change that could indicate that the asset is impaired. 

Our judgments regarding the existence of indicators of goodwill impairment are based on several factors, including the performance of the end markets served by our customers, as well as the actual financial performance of our reporting units and their respective financial forecasts over the long-term. We evaluate goodwill for impairment in the fourth quarter of each fiscal year, unless events occur which trigger the need for an earlier impairment review.

Identification of reporting units. As of September 30, 2024, we had seven reporting units, Automotive, HVOR, Industrial Solutions, Aerospace, Clean Energy Solutions, Aftermarket and Dynapower. During the second half of 2024, we reorganized our Sensing Solutions operating segment, which resulted in the realignment of our reporting units during Q4 2024. As a result of this reorganization, our Clean Energy Solutions reporting unit, which includes high-voltage contactors, was combined with our existing Industrial Solutions reporting unit creating one reporting unit, Industrial Solutions. There have been no subsequent changes to our reporting units as of December 31, 2024.

These reporting units have been identified based on the definitions and guidance provided in FASB ASC Topic 350. Identification of reporting units includes an analysis of the components that comprise each of our operating segments, which considers, among other things, the manner in which we operate our business and the availability of discrete financial information. Components of an operating segment are aggregated to form one reporting unit if the components have similar economic characteristics. We periodically review these reporting units to ensure that they continue to reflect the manner in which the business is operated. 

Assignment of assets, liabilities, and goodwill to reporting units. Some assets and liabilities relate to the operations of multiple reporting units. We allocate these assets and liabilities to the reporting units based on methods that we believe are reasonable and