|TERRAFORM POWER, INC. filed this Form 10-K on 03/07/2018|
corresponding renewable energy facility, consistent with the period over which depreciation expense is recorded on the corresponding asset retirement cost recognized within renewable energy facilities and with its estimate of the future timing of settlement.
The Company did not have any assets that were legally restricted for the purpose of settling the Company's asset retirement obligations as of December 31, 2017, 2016 and 2015.
Goodwill is recorded as the difference between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired. The Company did not have any goodwill as of December 31, 2017 or 2016.
During 2015, the Company recorded $55.9 million of goodwill attributable to its 2014 acquisition of solar distributed generation facilities from Capital Dynamics, which provided the Company with a scalable distributed generation platform. The goodwill existed within the Company's distributed generation reporting unit within the solar reportable segment and was not deductible for federal income tax purposes. The Company performed its annual impairment test of the carrying value of its goodwill as of December 1, 2016 and concluded that the goodwill balance of $55.9 million was fully impaired. The impairment was driven by a combination of factors, including lack of near-term growth in the operating segment. The impairment test determined there was no implied value of goodwill, which resulted in an impairment charge of $55.9 million as reflected in goodwill impairment within the consolidated statement of operations for the year ended December 31, 2016.
The Company used an income approach methodology of valuation, which used the discounted cash flow method based on forecasted cash flows of the distributed generation reporting unit. The market approach was considered but not used due to the lack of direct similarities with comparable companies in the market.
The following table presents the gross carrying amount, accumulated amortization and net book value of intangibles as of December 31, 2017:
(In thousands, except weighted average amortization period)
Weighted Average Amortization Period
Gross Carrying Amount
Net Book Value
Favorable rate revenue contracts
In-place value of market rate revenue contracts
Favorable rate land leases
Total intangible assets, net
Unfavorable rate revenue contracts
Unfavorable rate O&M contracts
Unfavorable rate land lease
Total intangible liabilities, net