NOTE 9: GOODWILL

Goodwill is tested for impairment annually in the fourth quarter of each year and is examined between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

In June 2022, the Company decided to discontinue its stand-alone Critical Power activities. The Company recorded a loss in the amount of $2,782 pertaining to Critical Power's goodwill.

The Company completed its annual goodwill impairment test in the fourth quarter of 2022 for all reporting units and determined the following:

Qualitative assessment of the Company’s storage reporting unit was performed in order to determine whether it is necessary to conduct the quantitative goodwill impairment test. Based on the results, the Company believes that it is more likely than not that the fair value of said reporting unit is greater than its carrying value and therefore a quantitative goodwill impairment test was not performed, and no goodwill impairment was recorded.

Due to impairment indicators of the e-Mobility reporting unit, which include, among other things, a shift in the Company's strategy that may result in a decline of the projected growth forecasted at the time of acquisition, the Company performed a quantitative goodwill impairment test. As a result, the Company recorded goodwill impairment in the amount of $80,534 which is presented under Goodwill impairment and other operating expenses (income), net in the consolidated statement of income.

In addition, a quantitative test has also been performed for the Automation Machines reporting unit due to indicators of impairment identified, which include, among other things, managerial changes and a decline in the overall financial performance compared with past projections. As a result, the Company recorded goodwill impairment in the amount of $6,788, which was recorded under Goodwill impairment and other operating expenses (income), net in the consolidated statement of income.

The fair value of the reporting units was estimated using a discounted cash flow analysis. When performing this analysis, the Company also considered multiples of earnings from comparable public companies. The decline in fair value primarily resulted from an increased discount rate and reduced estimated future cash flows.

The following summarizes the goodwill activity for the year ended December 31, 2022, and 2021:

	Solar			All other			Total
Goodwill at December 31, 2020	$	33,255		$	107,224		$	140,479
Changes during the year:
Foreign currency adjustments		(2,750	)		(8,100	)		(10,850	)
Goodwill at December 31, 2021		30,505			99,124			129,629
Changes during the year:
Foreign currency adjustments		(1,737	)		(6,599	)		(8,336	)
Accumulated impairment losses		-			(90,104	)		(90,104	)
Goodwill at December 31, 2022	$	28,768		$	2,421		$	31,189

As of December 31, 2022 there were $90,104 accumulated goodwill impairment losses. As of December 31, 2021 and 2020 there were no accumulated goodwill impairment losses.