Table:
|  | Years Ended December 31, |  |
| --- | --- | --- |
|  | 2019 | 2018 |
|  | (in thousands) |  |
| Beginning balance | $238,330 | $237,992 |
| Adjustments | — | 338 |
| Ending balance | $238,330 | $238,330 |
Paragraphs:
Goodwill
Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company's estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date).
The following table presents the changes in the carrying amount of goodwill for the periods indicated:
The Company performs an annual goodwill impairment assessment on October 31st each year, using a two-step quantitative assessment. Step one is the identification of potential impairment. This involves comparing the fair value of each reporting unit, which the Company has determined to be the entity itself, with its carrying amount, including goodwill.
If the fair value of a reporting unit exceeds the carrying amount, the goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any.
The Company determined there were no indications of impairment associated with goodwill. As a result,n o goodwill impairment was recognized as of October 31, 2019. In addition to its annual review, the Company performs a test of impairment when indicators of impairment are present. As of December 31, 2019, there were no indications of impairment of the Company’s goodwill balances.
Question:
How does Goodwill arise from?
Answer: the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired.