Company: ACCO
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000950170-25-024931
Chunk: 154

Company: ACCO BRANDS Corp
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1B
Chunk 154
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 critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s evaluation of the OSMI finished goods inventory write-down process, including controls over the write-down percentages applied to certain finished good inventory. We obtained the OSMI finished goods inventory write-down assessment, and tested that the OSMI write-down was recorded based on the write-down percentages applied to certain finished good inventory. We compared current year write-offs and write-down percentages used to the prior year OSMI reserve and to historical write-down percentages used. We also analyzed a sample of inventory items to evaluate whether the appropriate write down percentage was applied based on the nature and condition of the item.

Impairment Assessment of Americas Reporting Unit Goodwill and Five Star Trade Name Intangible Asset

As discussed in Note 2 and Note 9 to the consolidated financial statements, the carrying value of the Company's goodwill and amortizable intangible assets as of December 31, 2024 was $446.4 million and $652.9 million, respectively. The Company performs a goodwill impairment assessment on an annual basis during the second quarter of each fiscal year and whenever circumstances or other events occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. During the second quarter of 2024, the Company identified a triggering events and performed a quantitative assessments as of May 31, 2024 and concluded that the goodwill specific to the Americas reporting unit and the Five Star trade name were impaired by $127.5 million and $37.7 million, respectively. As of June 1, 2024, the Company 

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changed the Five Star indefinite-lived trade name to an amortizable intangible asset as it no longer met the indefinite-lived criteria.

We identified the evaluation of the recoverability of the carrying value of goodwill for the Americas reporting unit and the Five Star trade name as a critical audit matter. Subjective auditor judgment was required to evaluate certain assumptions used in the determination of the fair value of the Americas reporting unit and Five Star trade name, including forecasted revenues, market multiples, royalty rate, and the discount rates because they were based on determinations of future market and economic conditions. Changes to these assumptions could have had a significant effect on the Company’s assessment of the fair value of the Americas reporting unit and the Five Star trade name and the amount of impairment recorded. Additionally, involvement of professionals with specialized skill and knowledge was required to assess the market multiples, royalty rate, and the discount rates