Company: ACA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001739445-25-000026
Chunk: 105

Company: Arcosa, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 105
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angible assets.

We periodically evaluate the carrying value of long-lived assets for potential impairment whenever facts and circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The carrying value of long-lived assets is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset or asset group is less than their carrying value. Fair value is determined primarily using the estimated future cash flows discounted at a rate commensurate with the risks involved or market quotes as available. Significant estimates and judgments that most significantly impact the impairment analysis may include projected revenues, operating profit, and the remaining useful life over which the asset or asset group is expected to generate cash flows. 

Impairment losses on long-lived assets held for sale are determined in a similar manner, except that estimated fair values are reduced by the estimated cost to dispose of the assets.

The Company recorded an impairment of $5.8 million during the year ended December 31, 2024 related to the closure of the Company's aggregates operations in west Texas in our Construction Products segment. The Company had no impairment charges during the years ended December 31, 2023 or 2022.

Goodwill

Goodwill is required to be tested for impairment annually or on an interim basis whenever events or circumstances change indicating that the carrying amount of the goodwill might be impaired. The quantitative goodwill impairment test is assessed at the “reporting unit” level by comparing the reporting unit's estimated fair value with the carrying amount of its net assets. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized. The goodwill impairment is measured as the excess of the reporting unit's carrying value over its fair value, not to exceed the amount of goodwill allocated to the reporting unit. The estimates and judgments that most significantly affect the fair value calculations consist of level three inputs related to revenue and operating profit growth and discount rates. The Company performs its annual goodwill impairment analysis as of October 1 of each year.

As of December 31, 2024, goodwill totaled $1,361.2 million. Based on the Company's annual goodwill impairment test, performed at the reporting unit level as of October 1, 2024, the Company concluded that no impairment charges were determined to be necessary and that none of the reporting units evaluated were at risk of failing the goodwill impairment test. A reporting unit is considered to be at risk if its estimated fair value does not exceed the carrying value of its net assets by