Company: TRUE
Filing Date: 2025-02-21
Form Type: 10-K/A
Source: 0001327318-25-000010
Chunk: 18

Company: TrueCar, Inc.
Filing Date: 2025-02-21
Form: 10-K/A
Chunk 18
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 Hollenshead, Zamora and the Company. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions thereof, the Company paid the Sellers $ 17.9million in cash consideration and made a $ 5million capital contribution to Accu-Trade. The Compa ny recognized its p roportional share of the income or loss from the equity method investment on a one-quarter lag due to the timing and availability of financial information from Accu-Trade.

Included in the initial carrying value of $ 22.9million, which represents the fair value on the transaction date, was a basis difference of $ 22.9million related to the difference between the cost of the investment and the Company’s proportionate share of the net assets of Accu-Trade. The carrying value of the equity method investment was primarily adjusted for the Company’s share in the income and losses of Accu-Trade and amortization of the basis difference. The Company amortized its basis difference between the estimated fair value and the underlying book value of Accu-Trade’s technology and guarantor relationship over their respective useful lives using the straight-l ine method. These intangible assets were am ortized over a weighted-average useful life of approximately 5years measured at the transaction date.

Th e Company assessed the carrying value of its investment in Accu-Trade for impairment whenever changes in the facts and circumstances indicated a loss in value had occurred. When indicators existed, the fair value was estimated and compared to the investment carrying value. If any impairment was judgmentally determined to be other than temporary, the carrying value of the investment was written down to fair value. On February 2, 2022, the Company entered into a redemption agreement with Accu-Trade to redeem the Company’s 20% ownership interest in Accu-Trade. As a result of the events and circumstances leading up to the Company’s entry into the redemption agreement with Accu-Trade, the Company concluded that the investment in Accu-Trade was impaired and recorded a $ 4.1million impairment charge in its equity method investment for the year ended December 31, 2021.

On March 1, 2022, the Company sold its 20% ownership interests in Accu-Trade at the investment’s carrying value and recorded a derivative asset for the right to receive escrow payments. For the year ended December 31, 2022, we recognized a gain of $ 1.8million from changes in fair value of the derivative asset