Billboard Magazine reports:
Verizon Communications has recorded a steep goodwill impairment charge on its Oath media division. The telecom giant said on Tuesday that the creation of Oath after it acquired Yahoo for $4.5 billion and merged it with AOL has led to a charge of around $4.6 billion during the fourth quarter of 2018.
“The goodwill balance of the Oath reporting unit was approximately $4.8 billion prior to the incurrence of this impairment charge,” Verizon revealed in an SEC filing Tuesday. That means Oath’s goodwill value has been virtually eliminated.
Verizon acquired legacy internet giant AOL in 2015 for $4.4 billion as part of an effort to build out its media and advertising business. In 2016, Verizon added to the portfolio with the acquisition of beleaguered internet company Yahoo.
Oath comprises AOL, Yahoo, MapQuest, Tumblr, TechCruch, HuffPo, and other media outlets. Today’s move doesn’t appear to be related on Tumblr’s recent ban on adult content, but we’re guessing it didn’t help.
Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business. Goodwill represents assets that are not separately identifiable. Goodwill does not include identifiable assets that are capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability regardless of whether the entity intends to do so.