Company: DHR
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000313616-25-000043
Chunk: 185

Company: DANAHER CORP /DE/
Filing Date: 2025-02-20
Form: 10-K
Item: Item 5
Chunk 185
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 the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of the Company’s reporting units ranged from approximately 55% to approximately 395%.

The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  Determining whether an impairment loss occurred for finite-lived intangibles requires a comparison of the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset.  These analyses require management to make judgments and estimates about future revenues, expenses, market conditions and discount rates related to these assets.  Indefinite-lived intangibles are subject to impairment testing at least annually or more frequently if events or changes in circumstances indicate that potential impairment exists.  Determining whether an impairment loss occurred for indefinite-lived intangible assets involves calculating the fair value of the indefinite-lived intangible assets and comparing the fair value to their carrying value.  If the fair value is less than the carrying value, the difference is recorded as an impairment loss.  

If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings which would adversely affect the Company’s financial statements. 

The Company estimates the fair value of acquired trade names through the use of a relief from royalty method, which values an indefinite-lived intangible asset by estimating the royalties saved through the ownership of an asset.  Under this method, an owner of an indefinite-lived intangible asset determines the arm’s length royalty that likely would have been charged if the owner had to license the asset from a third party.  The royalty rate, which is based on the estimated rate applied against forecasted sales, is tax-effected and discounted at present value using a discount rate commensurate with the relative risk of achieving the cash flow attributable to the asset.  Management judgment is necessary to determine key assumptions, including revenue growth rates, perpetual revenue growth rates, royalty rates and discount rates.  As further described in Note 10 to the accompanying Consolidated Financial Statements, the Company recorded noncash impairment charges of $265 million pretax ($201 million after-tax) for the year ended December 31, 2024 related to an indefinite-lived trade name within the genomics consumable business included in the Life Sciences segment and an indefinite-lived trade name in the Diagnostics segment, which are included in selling, general and administrative expenses in the