Company: EVC
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034661
Chunk: 283

Company: ENTRAVISION COMMUNICATIONS CORP
Filing Date: 2025-03-06
Form: 10-K
Item: Item 8
Chunk 283
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 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to an account or disclosure that is material to 

F-2

the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the 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.

Goodwill Impairment – Refer to Notes 2 and 6 to the financial statements

Critical Audit Matter Description 

The Company tests its goodwill for impairment annually or more frequently if an event or certain change in circumstances indicate the fair value of each of its reporting units is less than their respective carrying amounts.  If it is deemed more likely than not that the fair value of a reporting unit is less than the carrying value based on this initial assessment, the next step is a quantitative comparison of the fair value of the reporting unit to its carrying amount. When the Company performs a quantitative analysis, the Company estimates the fair value of its reporting units using a combination of a market approach and an income approach. The market approach estimates fair value by applying sales, earnings and cash flow multiples to each reporting unit’s operating performance. The multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics to the Company’s reporting units. The market approach requires the Company to make a series of assumptions, including the selection of comparable companies, comparable transactions and transaction premiums. The income approach estimates fair value based on the Company’s estimated future cash flows, discounted by an estimated weighted-average cost of capital.  The income approach incorporates a series of assumptions including, but not limited to, discount rates, revenue projections and profit margin projections. 

As described in Note 6 to the financial statements, the Company recognized a goodwill impairment charge of $