Company: PRMB
Filing Date: 2025-02-07
Form Type: S-1/A
Source: 0001193125-25-022806
Chunk: 125

Company: Primo Brands Corp
Filing Date: 2025-02-07
Form: S-1/A
Chunk 125
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 transaction price of a
contract is allocated to each distinct performance obligation and recognized as revenue when the customer receives the benefit of the performance obligation (BlueTriton has only one obligation).

The nature of BlueTriton’s contracts gives rise to variable consideration including volume-based rebates, growth incentives, point of
sale promotions, and other trade promotional discounts (sales incentives). For certain sales incentives, the accrual BlueTriton records for the rebate or discount that will be granted to the customer requires significant estimation. The critical
assumptions used in estimating the sales incentive accruals include BlueTriton’s estimate of expected levels of performance and redemption rates, which requires judgement. These assumptions are developed based upon the historical performance of
the customer’s participation with similar types of promotions adjusted for current trends. These estimated sales incentives are included in the transaction price of BlueTriton’s contracts with customers as a reduction within net sales and
are included as either a reduction in accounts receivable if the customer is entitled to take a deduction on their payment, or as accrued sales incentives in accruals and other current liabilities if BlueTriton anticipates needing to pay the
customer. Estimated discounts reflected in trade receivables, net of credit losses were $84.6 million and $97.7 million at December 31, 2023 and 2022, respectively. Accrued sales incentive obligations, recorded in accruals and other
current liabilities, were $45.5 million and $63.5 million at December 31, 2023 and 2022, respectively.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized, and as a result, impairment tests must
be performed at least annually, or more frequently if events or circumstances indicate that an asset may be impaired. Goodwill is tested for impairment at the reporting unit level and indefinite-lived intangible assets are tested for impairment at
the asset level.

Reporting units are determined based on one level below the operating segment level. In performing the goodwill
impairment test, BlueTriton may first perform a qualitative assessment or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. Factors considered include macroeconomic, industry and market
conditions, cost factors that would have a negative effect on earnings and cash flows, legal and regulatory environment, historical financial performance, and significant changes in BlueTriton’s operations or brand. If the qualitative
assessment indicates