Company: CPS
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001320461-25-000033
Chunk: 61

Company: Cooper-Standard Holdings Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 61
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 could have selected could have had a material impact on our financial condition or results of operations. Such critical accounting estimates are discussed below. For these, materially different amounts could be reported under varied conditions and assumptions. While other items in our consolidated financial statements require estimation, however, in our judgment, they are not as critical as those discussed below.

Goodwill. Goodwill is tested for impairment by reporting unit as of October 1 of each year and more frequently if events or circumstances indicate that an impairment may exist. We test goodwill for impairment by performing a qualitative assessment or using a quantitative test. If we elect to perform a qualitative assessment and determine it is more likely than not that a reporting unit’s carrying value is more than its fair value, the quantitative test is then performed. Otherwise, no further testing is required. For a quantitative goodwill analysis, fair value is based on the cash flows projected in the reporting units’ strategic plans and long-range planning forecasts, discounted at a risk-adjusted rate of return. Our long-range planning forecasts are based on our assessment of revenue growth rates generally based on industry specific data, external vehicle build assumptions published by widely used external sources, and customer market share data based on known and targeted awards over a three-year period. The projected profit margin assumptions included in the plans are based on the current cost structure and adjustments for anticipated cost reductions or increases. If different assumptions were used in these plans, the related cash flows 

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used in measuring fair value could be different and impairment of goodwill might be recorded. For the 2024 annual goodwill impairment test, we performed a qualitative assessment and determined that it is more likely than not that the fair values of our Sealing Systems, Fluid Handling Systems, and Industrial Specialty Group reporting units exceeded their carrying values. See Note 9. “Goodwill and Intangible Assets” to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data” of this Report for additional information.

Long-Lived Assets. We monitor our long-lived assets for impairment indicators on an ongoing basis. If impairment indicators exist, we analyze the undiscounted cash flows expected to be generated from the long-lived asset group compared to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived assets. Fair value is determined using various valuation approaches depending on the asset type. Fair value of machinery and equipment is based upon either