Company: LGN
Filing Date: 2025-07-15
Form Type: DRS/A
Source: 0000950123-25-006399
Chunk: 52

Company: Legence Corp.
Filing Date: 2025-07-15
Form: DRS/A
Chunk 52
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 potential impairment at least on an annual basis. We also assess the recoverability of the unamortized balance of our intangible assets when indications of
impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to our overall operations. The goodwill impairment test requires us to determine the fair value of our reporting units, which
are the components one level below our reportable segments. In determining fair value, we make significant judgments and estimates, including assumptions about our strategic plans with regard to our operations. We also analyze current economic
indicators and market valuations to help determine fair value. In the fiscal year 2024, we recognized a goodwill impairment of $17.8 million relating to the determination that the carrying amount of one of our reporting units exceeded its fair
value. In the fiscal year 2023, we recognized a goodwill impairment charge of $5.1 million relating to our determination that the carrying amount of one of our reporting units exceeded its fair value. In the fiscal year 2022, we recognized a
goodwill impairment of $23.4 million relating to our determination that the carrying amount of two of our reporting units exceeded fair value. To the extent economic conditions that would impact the future operations of our brands change, our
goodwill may be deemed to be impaired, and we would be required to record a noncash charge that could have a material adverse impact on our business, financial condition and results of operations.

Our use of the cost-to-costinput method of accounting could result in a reduction or reversal of previously recorded revenue or profits.

We primarily measure the progress toward complete satisfaction of
performance obligation(s), and therefore a material portion of our revenue is recognized, using the cost-to-cost input method of accounting, which results in our
recognizing contract revenue and earnings ratably over the contract term in the proportion that our actual costs bear to our estimated contract costs. The earnings or losses recognized on individual contracts are based on estimates of contract
revenue, costs and profitability. We review our estimates of contract revenue, costs and profitability on an ongoing basis. Prior to contract completion, we may adjust our estimates on one or more occasions as a result of change orders to the
original contract, collection disputes on amounts invoiced or claims for increased costs incurred by us due to delays and other factors. Contract losses are recognized in the fiscal period when the loss is determined. Contract profit estimates are
also adjusted in the fiscal period in which it is determined that an adjustment is