Company: LGN
Filing Date: 2025-09-02
Form Type: S-1/A
Source: 0001193125-25-193346
Chunk: 281

Company: Legence Corp.
Filing Date: 2025-09-02
Form: S-1/A
Chunk 281
---
 names, and contract backlog. All finite-lived identifiable intangible
assets are subject to amortization on a straight-line basis over their estimated lives. Refer to “” for additional information regarding intangible assets.

Long-Lived Assets Impairment

Long-lived assets, which
include property and equipment, operating lease right-of-use assets, and intangible assets subject to amortization, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability generally is determined by comparing the carrying value of an asset group to the expected undiscounted future cash flows of the asset
group. If the carrying value of an asset group exceeds its expected undiscounted future cash flows (i.e., not recoverable), the amount of impairment loss is measured as the difference between the carrying value of the asset group and its estimated
fair value generally using the expected discounted future cash flows. During the fourth quarter of 2024, the Company determined that a triggering event had occurred for long lived assets related to a reporting unit in the Engineering &
Consulting segment. The triggering event occurred as a result of a decline in projected cash flows due to lower revenue projections, among other factors. Lower revenue projections primarily reflected the impact of delayed contract awards and the
uncertainty that revenue will be realized for these contracts which are point-in-time revenue recognition contracts. The triggering event resulted in the performance of a recoverability test for the long-lived assets in the related asset group prior
to assessing goodwill for impairment. The Company determined that the estimated undiscounted cash flows were sufficient to cover the carrying values and concluded that no impairments were necessary. No impairment charge was recorded against
long-lived assets for the years ended December 31, 2024, 2023 or 2022.

Equity Method Investments

The Company has investments in a number of joint ventures, some of which are VIEs. For VIEs where the Company is not the primary beneficiary, the Company
accounts for its investments using the equity method of accounting. Any investment in a joint venture that is not a VIE and for which the Company has investments between 20% and 50% is accounted for using the equity method of accounting when the
Company has the ability to exercise significant influence, but not control. The joint venture investments are included in Other assets on the Consolidated Balance Sheets and are adjusted for contributions made, distributions received, impairments
and the Company’s share of income or loss. Equity in earnings