Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 209

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 209
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 in preparing projected financial information for the period ending December 31, 2022 proved to be inaccurate, and operating results were below forecast amounts. Therefore the Company determined that a triggering event had occurred. We performed the quantitative impairment test using an income approach. The prospective information used in the income approach were based on the restated results of operations for the year ended December 31, 2022 and what would have been "known and knowable" as of December 31, 2022, with the forecast based only on the facts, circumstances, and events that were known or reasonably foreseeable as of the impairment date. We considered macroeconomic data, industry and reporting unit specific facts and circumstances and developed the prospective financial information based on our best estimate of operational results and cash flows for the Lugano reporting unit as of the date of our impairment testing. The results of the quantitative impairment testing indicated that the fair value of the Lugano reporting unit did not exceed its carrying value, resulting in goodwill impairment expense of $26.2 million in the year ended December 31, 2022.

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#### Definite-Lived Intangible Assets
Long-lived intangible assets subject to amortization, including customer relationships, non-compete agreements, permits and technology are amortized using the straight-line method over the estimated useful lives of the intangible assets, which we determine based on the consideration of several factors including the period of time the asset is expected to remain in service. We evaluate long-lived assets for potential impairment whenever events occur or circumstances indicate that the carrying amount of the assets may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount of a long-lived asset is not recoverable and is greater than its fair value, the asset is impaired and an impairment loss must be recognized.

The determination of fair values and estimated useful lives requires significant judgment both by our management team and by outside experts engaged to assist in this process. This judgment could result in either a higher or lower value assigned to our reporting units and intangible assets. The impact could result in either higher or lower amortization and/or the incurrence of an impairment charge.

Definite-Lived Intangible Asset Impairment Testing

Lugano - We performed an impairment test of the definite lived intangible assets at Lugano at December 31, 2023 and 2022