Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 267

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 16
Chunk 267
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. The $7.4 million in unrecognized tax benefits is recorded as a reduction to the gain on sale related to the sale of our Ergobaby subsidiary in the year ended December 31, 2024. The $27.9 million in unrecognized tax benefits is recorded as a reduction to the gain on sale related to the sale of our ACI and Marucci subsidiaries in the year ended December 31, 2023. If recognized, the tax benefit would result in additional gain on sale of discontinued operations. The Company accrues interest and penalties related to uncertain tax positions. The amounts accrued at December 31, 2024, 2023 and 2022 are not material to the Company.  Such amounts are included in the provision (benefit) for income taxes in the accompanying consolidated statements of operations. It is expected that the amount of unrecognized tax benefits will change in the next twelve months. However, we do not expect the change to have a significant impact on the consolidated results of operations or financial position.Each of the Company’s businesses file U.S. Federal, state and foreign income tax returns in multiple jurisdictions with varying statutes of limitations. The 2019 through 2024 tax years generally remain subject to examinations by the taxing authorities.

Note L — Fair Value Measurement 

There were no assets or liabilities measured on a recurring basis as of December 31, 2024 or December 31, 2023.

F-48

COMPASS DIVERSIFIED HOLDINGSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

The Company had no assets or liabilities Level 3 fair value measurements during 2024. A reconciliation of the change in the carrying value of the Company’s Level 3 fair value measurements during the year ended December 31, 2023 is as follows:Year ended December 31,(in thousands)2023Balance at January 1st$(1,442)Termination of put option of noncontrolling shareholder - 5.11(1)142 Adjustment to contingent consideration - King's Camo(2)25 Payment of contingent consideration - Kings's Camo(2)1,275 Balance at December 31st$— (1)Represented a put option issued to a noncontrolling shareholder in connection with the 5.11 acquisition. The put option was terminated during the period ended March 31, 2023.(2)Velocity entered into a contingent consideration in connection with its purchase of King's Camo in July