Company: WKC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001628280-25-007620
Chunk: 183

Company: WORLD KINECT CORP
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 183
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 impact that this volatility may have had on the estimated fair value of our reporting units. For our cost and equity method investments, the profitability embedded in the projected cash flows provided by our investees are a critical estimate.A reporting unit is considered at risk when its fair value does not exceed its carrying amount by more than 10%. While our aviation reporting unit is not considered at risk, as a result of the performance during the current year combined with updated projections, we noted that the excess of the fair value over the carrying amount of our land reporting unit has decreased since December 31, 2023 and is considered to be at risk as of December 31, 2024. If our results differ significantly from our assumptions, such impact could potentially result in impairments. Approximately $827.3 million of goodwill is allocated to the land reporting unit as of December 31, 2024. See Note 6. Goodwill and Identifiable Intangible Assets for additional information.Accounts Receivable and Allowance for Credit LossesWe maintain a provision for estimated credit losses based upon our historical experience with our customers, any specific customer collection issues that we have identified from current financial information and business prospects, as well as forward-looking information from market sources.We consider historical payment trends of our customers together with internal and external information about the economic outlook, geopolitical risks and macroeconomic events, which may not fully capture the current or future creditworthiness of our customers, particularly in difficult economic periods.As a result of the challenges inherent in estimating which customers are less likely to remit amounts owed to us, our provision for estimated credit losses may not always be sufficient. Any write-off of accounts receivable in excess of our provision for credit losses could adversely affect our results of operations and cash flow.

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Table of Contents

DescriptionJudgments and UncertaintiesEffect if Actual Results Differ from AssumptionsBusiness CombinationsA business combination occurs when an entity obtains control of a "business." To conclude if the definition of a business is met, we assess whether or not substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, which requires the use of significant judgment to determine the fair value. The determination of whether the acquired activities and assets constitute a business is critical because the accounting for a business combination differs significantly from that of an asset acquisition. Business combinations are accounted for using a fair value model. In contrast, asset acquisitions are accounted for using a cost accumulation and allocation model.Significant judgment is involved