Annual report pursuant to Section 13 and 15(d)

INTANGIBLE ASSETS

v3.22.4
INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2022
INTANGIBLE ASSETS  
INTANGIBLE ASSETS

NOTE F -INTANGIBLE ASSETS

In accordance with ASC 350, “Intangibles—Goodwill and Other”, goodwill and other intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. The Company reviews and evaluates its goodwill and indefinite life intangible assets for potential impairment at a minimum annually or more frequently if circumstances indicate that impairment is possible.

The Company determined the fair value of assets acquired and liabilities assumed using a variety of methods. An income approach based on discounted cash flows was used to determine the values of our trademarks, customer relationships and FAA certifications. The assumptions we used to estimate the fair value of our reporting units are based on historical performance, as well as forecasts used in our current business plan and require considerable management judgment.

The Company’s goodwill and intangible assets as defined by ASC 350 are related to its subsidiaries, AerSale Component Solutions (d/b/a AerSale Landing Gear Solutions) (“ALGS”), Avborne Component Solutions (d/b/a AerSale Component Solutions) (“ACS”), and Aircraft Composite Technologies (“ACT” or “AerSale AeroStructures - Miami”),

which are included in the TechOps segment, as well as Qwest, which is included under the Asset Management Solutions segment.

Goodwill and other intangibles consisted of the following (in thousands):

    

December 31, 2022

    

December 31, 2021

Qwest:

FAA Certifications

$

724

$

724

Goodwill

 

13,416

 

13,416

ALGS:

 

  

 

  

FAA Certifications

 

710

 

710

Goodwill

 

379

 

379

ACS:

 

  

 

  

Trademarks

 

600

 

600

FAA Certifications

 

7,300

 

7,300

Goodwill

 

63

 

63

ACT:

 

Trademarks

 

200

 

200

FAA Certificates

 

796

 

796

Goodwill

 

6,002

 

6,002

Total intangible assets with indefinite lives

$

30,190

$

30,190

The Company performed its annual quantitative impairment analysis as of July 1, 2022 and 2021 on the indefinite lived intangible assets and concluded there were no impairments. The Company performed a qualitative impairment analysis as of October 1, 2022 and 2021 on the goodwill for the Asset Management Solutions and TechOps segment, and concluded there was no impairment.

Intangible assets with definite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets with definite lives are as follows (in thousands):

    

Useful Life

    

    

 In Years

December 31, 2022

December 31, 2021

Qwest:

Customer relationships

10

$

6,136

$

7,109

ALGS:

  

 

 

Customer relationships

10

 

50

 

70

ACS:

  

 

  

 

  

Customer relationships

10

 

1,243

 

1,453

ACT:

  

 

 

Customer relationships

10

 

6,353

 

7,276

Total intangible assets with definite lives

$

13,782

$

15,908

Amortization expense was as follows (in thousands):

Year Ended December 31, 

    

2022

    

2021

    

2020

Amortization expense

$

2,136

$

2,132

$

2,108

The estimated aggregate amount of amortization expense for intangible assets in each fiscal year from 2023 through 2027 is $2.1 million. Accumulated amortization amounted to $7.2 and $5.1 million as of December 31, 2022 and December 31, 2021, respectively.

Goodwill activity for the years ended December 31, 2022 and 2021 consisted of the following (in thousands):

    

Asset

    

    

    

    

Management

 

Solutions

 

TechOps

 

Total

Goodwill as of December 31, 2020

$

13,416

 

$

6,444

 

$

19,860

Additions

-

 

-

 

-

Goodwill as of December 31, 2021

$

13,416

 

$

6,444

 

$

19,860

Additions

 

-

 

-

 

-

Goodwill as of December 31, 2022

$

13,416

$

6,444

$

19,860

Other intangible assets are reviewed at least annually or more frequently if any event or change in circumstance indicates that an impairment may have occurred.