Priority Technology Holdings Inc

7. Goodwill and Other Intangible Assets

Goodwill

The Company records goodwill upon acquisition of a business when the purchase price is greater than the fair value assigned to the underlying separately identifiable tangible and intangible assets acquired and the liabilities assumed. The Company's goodwill relates to the following reporting units:

The following table summarizes the changes in the carrying value of goodwill:

For business combinations consummated during the year ended December 31, 2023, goodwill was fully deductible for income tax purposes.

The Company performed its most recent annual goodwill impairment analysis as of October 1, 2023, as noted below:

•For the purpose of the goodwill impairment analysis, the Company determined the reporting units were Enterprise Payments, SMB Payments, and Plastiq, a component of the B2B Payments operating segment, as allowed by ASC 350.

•The Company's SMB Payments operating segment experienced a decrease in bankcard volume and revenue during 2023 due to the diversification of an ISV. Additionally, this operating segment also experienced compressed margins due to expenses associated with costs of sales increasing at a larger rate than revenue. Considering the most recent fair value valuation was performed in 2019, the Company elected the option to unconditionally bypass the qualitative impairment analysis and proceed with performing the quantitative analysis for the SMB Payments reporting unit as allowed by ASC 350. For the purpose of the quantitative analysis, the guideline public company method and the discounted cash flow method (equally weighted) were determined to be the appropriate methodology. The impairment analysis concluded the fair value of the reporting unit was greater than its carrying amount and therefore, no impairment was recognized.

•The Company's Enterprise Payments operating segment had an increase in volumes, revenue and margins for 2023. The remaining goodwill related to the acquisition of Plastiq (see Note 2. Acquisitions). Given the performance of the Enterprise Payments operating segment and the relatively short time passed since the Plastiq acquisition, the Company elected to perform the qualitative impairment analysis for these reporting units. Under the qualitative impairment analysis, the Company identified drivers which may affect the reporting units' fair value, determined which events and circumstances impacted those drivers and concluded it was not more likely than not that the fair value of the reporting units was less than the carrying amount.

There were no impairment losses for the years ended December 31, 2023, 2022 or 2021.

As of December 31, 2023, the Company is not aware of any triggering events that have occurred since October 1, 2023.

Other Intangible Assets

At December 31, 2023 and 2022, other intangible assets consisted of the following:

(1)These assets have an indefinite useful life.

(1)These assets have an indefinite useful life.

The estimated amortization expense of intangible assets as of December 31, 2023, for the next five years and thereafter is:

(1)Total will not agree to the intangible asset net book value due to intangible assets with indefinite useful life.

Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives and other relevant events or circumstances.

The Company tests intangible assets for impairment when events occur or circumstances indicate that the fair value of an intangible asset or group of intangible assets may be impaired.

The Company also considered the market conditions and other factors and concluded that there were no additional impairment indicators present at December 31, 2023.