Company: IHETW
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001400891-25-000009
Chunk: 108

Company: iHeartMedia, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 108
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 audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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Valuation of Multiplatform Group and Digital Audio Group GoodwillDescription of the MatterAs described in Note 1 and Note 4 to the consolidated financial statements, at December 31, 2024 the Company’s goodwill was $1.1 billion. Management conducts impairment tests for goodwill annually, or more frequently, if events or circumstances indicate the carrying value of goodwill may be impaired. In the second quarter, the Company performed an interim impairment test which resulted in a goodwill impairment charge of $616.1 million related to the Multiplatform, and RCS reporting units.Auditing management’s interim impairment tests for the Multiplatform Group ("MPG") and Digital Audio Group ("DAG") goodwill was complex and judgmental and required the involvement of a valuation specialist. The fair value of these reporting units was estimated by the Company using a discounted cash flow approach. The Company's discounted cash flow models involve assumptions such as changes in projected revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and discount rates. These assumptions are sensitive to and affected by expected future market or economic conditions.How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above and management's review of data used in their valuation models. This included evaluating controls over the Company’s forecasting process used to develop the estimated future cash flows. To test the estimated fair values of the MPG and DAG reporting units, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions used by management, and evaluating the completeness and