Company: WW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029511
Chunk: 3

Company: WW INTERNATIONAL, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 15
Chunk 3
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 the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Annual and Interim Impairment Assessments – Goodwill Assessments for the Clinical Reporting Unit and Indefinite-Lived Franchise Rights Acquired (United States) Assessments

As described in Notes 2 and 7 to the consolidated financial statements, management reviews goodwill and indefinite-lived franchise rights acquired for potential impairment on at least an annual basis, in May of the second quarter, or more often if events so require. Based on triggering events, management performed interim impairment tests as of March 30, 2024, and September 28, 2024, on its goodwill and indefinite-lived franchise rights acquired for the first and third quarters of fiscal 2024, respectively. In performing the impairment analysis for goodwill, the fair value of the reporting units is estimated using a discounted cash flow approach. The estimated fair value is then compared to the carrying value of the reporting unit. In performing the impairment analysis for indefinite-lived franchise rights acquired, fair value is estimated using a discounted cash flow approach for franchise rights related to the Workshops + Digital business and a relief from royalty methodology for franchise rights related to the Digital business. The aggregate estimated fair value of the franchise rights is compared to the carrying value of the unit of account for these rights. In performing the interim indefinite-lived franchise rights acquired impairment tests as of March 30, 2024, and September 28, 2024, management determined that the carrying value of its United States franchise rights acquired exceeded the respective fair values, and management recorded impairment charges of $251.4 million and $54.3 million, respectively. There were no goodwill impairments in the year ended December 28, 2024. As of December 28, 2024, the goodwill associated with the Clinical reporting unit was $89.7 million and the indefinite-lived franchise rights acquired (United States) was $68.6 million. As disclosed by management, when determining fair value of the reporting units and indefinite-lived franchise rights acquired, management